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