THE Reserve Bank of Zimbabwe (RBZ) has said most of the companies that accessed funds from the productive sector facility (PSF) earlier this year have managed to pay back their loans. The ban
k said this week that it has managed a 100% recovery rate on the PSF loans.
However, sources say, most of the companies that borrowed from the facility are still heavily indebted to commercial and merchant banks through which the funds were disbursed.
“Loans under the facility are accessed through commercial and merchant banks who carry a 100% risk,” the central bank said this week in written responses to the businessdigest.
“All loans under the facility that have matured to date have been repaid by the respective banks except for loans accessed through banks that are under curatorship as their accounts are currently frozen.
“Thus the RBZ has achieved a 100% recovery rate on the PSF loans,” it said.
The RBZ called in the loans after discovering that companies which benefited from the fund had declared huge dividends but were failing to repay the loans.
The central bank said most financial institutions had repaid the loans to the Reserve Bank on behalf of their clients.
This means that a number of commercial and merchant banks are still badly exposed, as most companies are battling to repay the loans on time. It also reveals that the central bank has forced the banking sector, which is currently in heavy weather, to carry the risk associated with the PSF.
A total of $2,057 trillion has been disbursed under the facility.
There are fears that most of the banks which accessed the funds at a concessionary rate for on-lending to the productive sector might now charge indebted companies commercial interest rates prevailing on the market. Banks are charging interest rates averaging 100%.
A total of 3 572 companies in key sectors scrambled for the PSF loans, which carried a heavily subsidised rate of 30% and 50%. About 2 209 agricultural companies borrowed from the facility, of which 1 063 manufacturing firms also benefited.
There are 114 transport companies, 85 mining and 72 tourism firms that also accessed the funds. Other sectors that benefited includes 19 construction companies, six communication and three health firms. Only one distributor got the funds.
It is unclear how the RBZ managed a total recovery of the funds when governor Gideon Gono had earlier this year complained bitterly that many companies had defaulted. He is on record as having said that most companies had used the PSF funds to declare massive dividends to their shareholders.
“It is disheartening to note that some corporates have elected to declare hefty dividends well before making for their borrowings under the fund,” Gono said in his third monetary policy review statement in October.
“In some instances, corporates are daring to declare the fanfare dividends barely a few hours after accessing concessional support on the back of their purported distress calls.”