Cash crunch affects MFIs

The prevailing cash crunch besetting the country has not spared micro finance institutions (MFIs) as clients are forgoing loan repayments, an official has said. Zimbabwe Association of Micro-finance Institutions (Zamfi) executive director Godfrey Chitambo said the cash shortages in the market have resulted in some clients defaulting on loans secured from MFIs.

According to the Reserve Bank of Zimbabwe, total loans disbursed by MFIs increased from US$173,3 million in September 2015 to US$187,16 as of December last year.

Of the amount, US$101,52 million (54,4%) was channelled into consumption and US$85,64 million (45,6%) for development purposes which include agriculture, retail business and mining.

As at September 31 2015 53,73% of the US$173,3 million was channelled into developmental sector amounting to US$93,12 million.