Business / Economy
Zimbabwe's Gono accuse international banks of not lending to local companies
18 Jul 2011 at 23:56hrs | Views
The Reserve Bank of Zimbabwe Governor, Dr Gideon Gono, claims that Zimbabwean Banks are sitting on US$1 billion sourced from external sources in spite of claims by some local firms that they are struggling to access affordable long-term lines of credit to revive their operations.
He revealed this when he appeared together with the central bank's board before Parliament Portfolio Committee on Budget, Finance and Investment Promotion yesterday.
The money is repayable between four to five years.
Dr Gono said the funding facilities related to external lines of credit local banks had secured and requested the RBZ to approve in the last seven months.
Gono said as of July 15 this year total amount mobilised this year alone is US$1,6 billion but the amount that has been withdrawn is US$600 million, which means there is US$900 million, which could come into the economy for purposes of lending.
Dr Gono said the money was meant to fund various sectors of the economy with US$440 million earmarked for agriculture, US$283 million for financial services, while US$251 was for mining.
The manufacturing sector had US$290 million set aside for borrowing, the telecommunication sector US$260 million, while distribution and tourism industries have US$44 million and US$10 million respectively.
Dr Gono said the low utilisation was due to various reasons including unbankable project proposals by some firms.
Local firms have also complained that most of the credit facilities available in the local banking sector were largely short-term and expensive as banks took advantage of the liquidity constraints in the economy.
Dr Gono also accused international banks of sitting on millions of depositors' funds when most companies were in need of funding.
He, however, said only one bank offered substantial loans after lending US$600 million from its US$700 million deposits.
Dr Gono bemoaned the high interests rates charged by banks that ranged from 14 percent to 25 percent.
Against this background, Dr Gono said he would introduce a facility through the forthcoming Medium Term monetary policy review into which banks with surpluses would deposit their funds and earn market related interest.
He revealed this when he appeared together with the central bank's board before Parliament Portfolio Committee on Budget, Finance and Investment Promotion yesterday.
The money is repayable between four to five years.
Dr Gono said the funding facilities related to external lines of credit local banks had secured and requested the RBZ to approve in the last seven months.
Gono said as of July 15 this year total amount mobilised this year alone is US$1,6 billion but the amount that has been withdrawn is US$600 million, which means there is US$900 million, which could come into the economy for purposes of lending.
Dr Gono said the money was meant to fund various sectors of the economy with US$440 million earmarked for agriculture, US$283 million for financial services, while US$251 was for mining.
The manufacturing sector had US$290 million set aside for borrowing, the telecommunication sector US$260 million, while distribution and tourism industries have US$44 million and US$10 million respectively.
Dr Gono said the low utilisation was due to various reasons including unbankable project proposals by some firms.
Local firms have also complained that most of the credit facilities available in the local banking sector were largely short-term and expensive as banks took advantage of the liquidity constraints in the economy.
Dr Gono also accused international banks of sitting on millions of depositors' funds when most companies were in need of funding.
He, however, said only one bank offered substantial loans after lending US$600 million from its US$700 million deposits.
Dr Gono bemoaned the high interests rates charged by banks that ranged from 14 percent to 25 percent.
Against this background, Dr Gono said he would introduce a facility through the forthcoming Medium Term monetary policy review into which banks with surpluses would deposit their funds and earn market related interest.
Source - Byo24News
