Banks fail to disburse US$44m ZETREF funds

Gamma Mudarikiri

MOST banks are holding on to more than US$44 million in undisbursed funds under the Zimbabwe Economic and Trade Revival Fund (ZETREF) facility while industry continues to slump, largely due to limited access to credit lines, figures in the mid-term fiscal policy show.
ZETREF is a US$70 million facility jointly funded by the government and the African Export Import Bank (Afreximbank) and was launched in 2010 with the aim of easing liquidity challenges in the country and assisting recapitalisation of firms.

 
In his mid-term policy review statement last week, Finance minister Tendai Biti said as of June this year, banks signatory to the fund had only disbursed US$26,8 million of the allocated US$70 million.

 
The disbursal is likely to drag on since it has been worsened by Interfin Bank’s collapse.

 
The beleagured bank was an administrator to the fund and its demise resulted in Treasury and Afreximbank being exposed to up to US$50 million.

 
Interfin was last month placed under a six-month recuperative curatorship.

 
Banks which have not disbursed the ZETREF funds include TN, Trust and Kingdom among many others. Kingdom Bank has failed to approve or disburse any loans from the US$4 million it was allocated, he said.

 
The bank’s head of public relations, Sekai Chitemerere, said most prospective borrowers did not meet the institution’s internal credit terms as well as that of the fund.
“The majority of these applications neither met the bank’s internal credit nor ZETREF terms and conditions,” she said.

 
“However, we accepted and approved some applications which have now been submitted to the relevant authorities for further consideration and the process of disbursement will commence once the proposals have received final approval from the relevant authorities,” said Chitemerere.

 
The People’s Own Savings Bank (POSB) only approved US$250 000 from the US$5 million it was allocated as indicated in the mid-term policy.

 
However, POSB acting CEO Wilbert Fungura said the bank had submitted loan applications worth US$3,45 million, which are still awaiting approval from the regulating authority.
He said the process had been largely compromised by Interfin Bank’s failure as the local administrator agent to the fund.

 
BancABC had approved US$4 million worth of loans from the US$5 million it was allocated.

 
However, the bank has not yet made any disbursement.

 
BancABC head of corporate banking, Jeanatte Mazonde, said the whole process was being dragged by the delay in documentation. About US$1 million of the fund was now awaiting disbursement.

 
Mazonde said approval of US$3 million by the regulatory authorities was at an advanced stage and was expected to be finalised in the next three months.

 
The Infrastructure Development Bank of Zimbabwe was allocated US$10 million but has only disbursed US$600 000 while approved loans amounted to US$9,5 million.

 
TN Bank has only disbursed US$20 000 from the US$5 million it was allocated, while approved loans are currently valued at US$2,1 million.
TN Bank FD George Nyashanu was said to be out of the office.

 
A few of the banks’ signatories to the fund have so far made significant disbursement, with FBC paying out US$9 million from the allocated US$15 million.
NMB is only remaining with US$366 000 to disburse from US$5 million, Biti said. ZB Bank has disbursed half of the allocated US$5 million while Metropolitan Bank has loaned-out US$5 million.

 
Biti early this year blamed banks for slowing down the disbursement of ZETREF funds as they insisted on upfront fees from prospective borrowers.
The manufacturing sector has so far received the largest chunk, while 57% went to agriculture, 26% to health, 13% to tourism and the media 3%.