Matabeleland business people have criticized Finance Minister Tendai Biti after he was quoted as saying companies in the western Matabeleland region were slow to apply for credit under a US$70 million facility launched last August by the African Export-Import Bank and the government to recapitalize struggling firms.
The independent daily Newsday quoted Biti as saying that Matabeleland firms received US$12 million of a total US$30 million disbursed by the Commercial Bank of Zimbabwe and Interfin under the Zimbabwe Economic and Trade Revival Facility to date, or 40 percent. He said more applications from the region had been expected.
Biti attributed the low uptake of funds to a lack of information about how to apply for capital which is being made available at a 15 percent interest rate. The going market rate for business loans in Zimbabwe is close to 30 percent.
Bankers said fewer than 200 companies nationwide have applied for loans ranging from US$250,000 to US$1.5 million. Banks disbursing the money declined to provide details on the application and approval process. Minister Biti was not available for comment.
Bulisani Ncube, Matabeleland regional manager of the Zimbabwe National Chamber of Commerce said that government bureaucracy is hindering the placement of loans.
“If the government does not make any effort to provide the necessary information about these loan facilities, we end up believing that such projects are crafted by some parties to gain political mileage,” Ncube said.
Economist James Wade said the government should make sure that the loan application process is clearly explained to companies in need of working capital.
Economist Prosper Chitambara agreed that red tape is impeding industrial revival. “I believe that whoever is in charge of managing these funds ought to be proactive in dealing with companies that require credit lines,” Chitambara said.