MFIs loans clock record $1,2 billion

THE credit-only Micro-finance Institutions (MFIs’) loans reached a record high of $1,225 billion in the quarter ended 31 December 2020, signalling a strong market appetite despite economic shocks.

In a performance report for the period under review, the Zimbabwe Association of Micro-finance Institutions (Zamfi) said the remarkable growth trend shows the sector is emerging from the woods despite the economic recession occasioned by the Covid-19 health pandemic.

“As at 31 December 2020, outstanding loans amounted to $1,225 billion compared with $651,1 million as at 30 September 2020 and $567,7 million reported in June 2020.

“This is the first time for the sector to hit a ‘billion’ lending mark and as such represents a strong comeback of the sector in a period when the country is slowly but surely coming out of the woods on economic recession and the health pandemic,” it said.

Zamfi said a large percentage of the portfolio was made up of consumption and business loans amounting to $464,2 million (38 percent) and $385,3 million (31 percent), respectively.

“The bulk of the consumption loans during the period are reflective of the family needs for basic requirements,” said the MFIs association.

In 2020, the number of credit-only MFIs branches across the country stood at 357, out of which 111 or 31 percent were in rural areas, a development Zamfi says is an indication of progress being made in extending services to the rural markets and people.

The total number of active borrowers for credit only MFIs amounted to 157 941 with clients in rural areas amounting to about 30 000 or 18,9 percent.

“According to Government official reports, 67 percent of the country’s population is domiciled in rural areas and these remain largely untapped and unexploited for lending business both by the micro-finance institutions and banks,” said Zamfi. –chronicle.cl.zw