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Micro-finance dictates less favourable to women needs

Editorial

THE Zimbabwe Women’s Microfinance Bank (ZWMB) opened its doors last year, with the aim of empowering women by disbursing loans for various income-generating projects. Zimbabwe Independent business reporter Kudzai Kuwaza (KK) interviewed ZWMB chief executive Mandas Marikanda (MM, pictured) on various issues, including the bank’s journey thus far, its operations and outlook for the future. Below are the excerpts:

KK: Can you give us a brief history of the bank?

MM: The idea of a Women’s Bank was first put forward in 1982 by the Ministry of Community Development and Women’s Affairs, as a means by which women could get access to credit facilities. Women, who constitute 52% of the population, are believed to contribute immensely to the economy of Zimbabwe. The Zimbabwe Women’s Microfinance Bank Limited is a registered deposit-taking micro-finance institution, having been licenced and authorised by the Reserve Bank of Zimbabwe to conduct deposit-taking micro-finance business in terms of the Microfinance Act (Chapter 24:29), with effect from May 29 2018. The bank has been birthed to champion women’s financial inclusion and empowerment through access to affordable cheap funding.

As Zimbabwe Women’s Microfinance Bank, we realise the power of women in particular when they are equipped with the necessary tools, physically, emotionally, spiritually and socially. We are empowering women to be financially independent and included at the first Women’s Bank in Southern Africa, one of its own kind.

KK: Why a women’s bank?

MM: Despite gender sensitive government policies, women in Zimbabwe continue to have unequal access to finances, skills and markets in all sectors of the economy (agriculture, mining, tourism and trade).

Women have limited investment and revenue potential. Furthermore, the micro-finance opportunities available are not responsive to women’s needs. The issue of collateral security, including the lack of third-party guarantors leave women with little chance to qualify for credit.

The Protocol to the African Charter on Human and People’s Rights on the Rights of Women in Africa on access to property and resources requires that all states ensure that women have equal access and rights to credit, capital, mortgages, security and training as men.

ZWMB is mandated to empower all women economically and socially by providing access to affordable and innovative women-centred financial products and services as individuals, or in groups/clubs/cooperatives or as micro, small and medium enterprises. The bank’s head office is located at Trust Towers Building, 56 Samora Machel Avenue, Harare, where its flagship branch is also located on the ground floor.

The bank has an office at York House, Ground Floor, Cnr Herbert Chitepo and 8th Avenue in Bulawayo. There are service centres and agents in all provinces and in all the major economic centres of Zimbabwe. ZWMB offers to women throughout the country access to innovative financial and non-financial products and services in an easily accessible, affordable and simplified manner.

KK: How many accounts has the bank opened since inception?

MM: 69 000 accounts have been opened. ZWMB has disbursed more than ZW$13 million to more than 41 500 clients with projects across the 10 provinces of Zimbabwe.

KK: What type of loans do you offer?

MM: We offer various loans and these include:

l Joint liability group loans Micro farming loans;
l Micro-enterprise loans;
l SME loans;
l Corporate lending (salary-based loans for staff of private companies);
l Civil servants’ loans (SSB loans);
l Pensioners’ loan;
l Consumer loans;
l Micro-leasing/asset finance; and
l Value-chain loans.

The bank also offers non-financial services which are meant to help women as individuals or in groups to take advantage of economic opportunities, through training in literacy or basic financial skills, group capacity-building efforts, and providing information on available financial services.

KK: What are the loan requirements?
MM: The loan requirements are:

l A ZWMB savings account;
l Proof of income for salary-based and already existing projects;
l Projections for start-ups;
l Director’s resolution to borrow for SMEs; and
l Constitution for groups.

KK: What are the minimum and maximum amounts you give out in loans?

MM: A minimum loan of ZW$100 and maximum loan depends on the capacity to service the loan.

KK: What is the interest rate you charge on loans?

MM: The interest rates ranges from 5% to 10% per month depending on the loan product.

KK: What collateral do you look for when issuing out loans?

MM: Collateral depends on the loan amount required. The bank accepts both conventional collateral (motor vehicles, business assets and immovable property) and collateral substitutes such as group guarantees, individual guarantors, household property, livestock etc.

KK: What is the default rate of loans?

MM: The default rate of loans is 3,85% as at September 30 2019, which is very manageable and below the prescribed international standards.
KK: How do you ensure that loans are used for the intended purpose?

MM: We ensure that loans are used for what it is intended through a number of ways which include:

l Follow-up visits which are done post-disbursement of loans;
l Payments being made directly to clients’ suppliers; and
l Disbursement of loans in kind, for example, purchase of assets and inputs.

KK: How do you deal with defaulters?

MM: We have several ways of dealing with defaulters which include:

l Continuous engagement of clients and moral suasion on accounts in arrears;
l Emphasis on robust collection system;
l Having payment plans with clients and serving of demand letters; and
l The bank at times embarks on other procedures and legal proceedings to handle delinquent clients in accordance with credit policy.
KK: How do you deal with issuing loans in an inflationary environment such as we are in?

MM: We continuously review interest rates and loan limits to match the inflationary environment. We also emphasise on short loan tenures. We also emphasise on quick turnaround time to ensure price increases do not overtake loan purpose.
KK: What projects are being carried out by ZWMB?

MM: ZWMB is working with women on various projects throughout the country as follows:

l Agriculture through value chain financing with crops such as sorghum , sunflower, potato, sesame, cotton, caster bean farming and livestock production;
l Alternative clean and cheap energy including solar energy and solar home lighting systems; and
l Low-cost micro-insurance, including medical aid.

KK: Who are the beneficiaries of the Zimbabwe Microfinance Women’s Bank?

MM: ZWMB is empowering all women socially and economically with a deliberate focus on low-income earners residing in rural, peri-urban and urban areas. This includes women in farming, cross-border trading, vendors, and manufacturers. Women are encouraged to co-guarantee each other in groups, associations and co-operatives and all other sectors. Men and youth are encouraged and welcome to participate in the bank products too.

KK: What is the outlook for the bank over the next five years?

MM: The future is very bright as our drive is to ensure that we improve the livelihoods of all women. We plan to churn out more value chains to all the sectors of the economy including agriculture, mining, tourism and trade. We intend to actively participate in the green energy revolution and reach out to all women using the digital channels.

The bank is participating in the Command Agriculture for the small grains sorghum, sunflower, cowpeas, groundnuts and soyabean, among others. The bank will continue to finance all women according to their unique needs.

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