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MFIs loan disbursements up 33% in Q3, bank on price increases for increased business

22 Nov, 2018 - 12:11 0 Views

eBusiness Weekly

HARARE – Zimbabwe’s microfinance sector  recorded a jump of over 30 percent in loan disbursements to $116.5  million for the quarter ended September 2018 compared to the previous  quarter,an industry body said on Tuesday.

The Zimbabwe Association of Microfinance Institutions (Zamfi)said it  expected demand for credit to increase further, pushed up by the recent  retail price hikes.

The sector doubled its gross profit in the third quarter to $9.8 million.

The economy in October witnessed a surge in prices of goods and  services triggered by exchange rate fluctuations on the black market  and a new tax imposed on financial transactions by government.

“The strong outreach performance is a reflection of increased demand  for micro-loans by both individuals and small business engaging in  productive sectors of the economy,” Zamfi said.

“The momentum is most likely to be maintained during the last quarter  of the year in view of the sudden surge in prices which will most  likely increase the amount of loans required by borrowers.”

Zamfi said during the period, MFIs managed to reduce the portfolio at  risk to six percent from 7.4 percent in the previous quarter.

The bulk of the loans during the period were directed towards  consumption which accounted for 29 percent of the portfolio,  productive sector at 26 percent and agriculture at 23 percent.

“It should be noted that lending by microfinance sector to the  agriculture sector, at 23 percent is indeed quite an outstanding  achievement as this is the sector directly related to food security  and quick poverty alleviation among small holder farmers,” the  association said.

The bulk of the loans, 97 percent, went to individuals while groups  accounted for the remainder.

Of the total of 189 326 clients who got loans, males made up 55  percent while women accounted for 45 percent. – New Ziana

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