Business / Economy
Govt to tackle 'unethical' micro-finance institutions
19 Feb 2012 at 13:47hrs | Views
The Zimbabwe government is considering to enact a micro-finance law that governs the operations of small lenders.
The draft Micro-finance Bill, which is under consideration by the Ministry of Finance, the Reserve Bank of Zimbabwe (RBZ) and other stakeholders, is expected to address some of the problems facing the sector such as tenure of licences, consumer protection issues and transparent pricing in line with international developments.
In his recent monetary policy statement, RBZ Governor, Dr Gideon Gono said there were complaints from micro-finance clients about unethical business practices such as inadequate disclosure of business conditions and abusive debt collection practices without following due legal procedures.
An economic commentator, Mr Godfrey Dupwa said the bill is a necessary initiative to maintain order in the sector since there has been a proliferation of micro-finance institutions due to high demand for funds from emerging businesses.
There are 157 licensed micro-finance institutions currently operating under the supervision of the RBZ.
The sector is however facing a number of challenges such insufficient funding, inadequate infrastructure and the absence of a Credit Reference Bureau.
As part of the initiatives to improve the availability of funding to the sector, the Zimbabwe Association of Micro-finance Institutions has spearheaded the establishment of a micro-finance wholesale fund that is expected to provide a source of affordable wholesale funding.
The draft Micro-finance Bill, which is under consideration by the Ministry of Finance, the Reserve Bank of Zimbabwe (RBZ) and other stakeholders, is expected to address some of the problems facing the sector such as tenure of licences, consumer protection issues and transparent pricing in line with international developments.
In his recent monetary policy statement, RBZ Governor, Dr Gideon Gono said there were complaints from micro-finance clients about unethical business practices such as inadequate disclosure of business conditions and abusive debt collection practices without following due legal procedures.
An economic commentator, Mr Godfrey Dupwa said the bill is a necessary initiative to maintain order in the sector since there has been a proliferation of micro-finance institutions due to high demand for funds from emerging businesses.
There are 157 licensed micro-finance institutions currently operating under the supervision of the RBZ.
The sector is however facing a number of challenges such insufficient funding, inadequate infrastructure and the absence of a Credit Reference Bureau.
As part of the initiatives to improve the availability of funding to the sector, the Zimbabwe Association of Micro-finance Institutions has spearheaded the establishment of a micro-finance wholesale fund that is expected to provide a source of affordable wholesale funding.
Source - Zbc
