Business / Local
Only three Bulawayo companies benefit from distressed companies fund
16 Feb 2012 at 10:07hrs | Views
ONLY three companies have so far benefited from the Distressed Industries and Marginalised Areas Fund (Dimaf) as several have been turned down due to the stringent conditions that were set by the disbursing agent, a Cabinet Minister has said.
In an interview yesterday, Minister of Industry and Commerce, Welshman Ncube said Cabinet had agreed to hold discussions with the disbursing agent, CABS, with a view to relaxing some of the Dimaf rules and regulations in order for more companies to benefit from the fund.
"Out of the 60 companies that applied to benefit from Dimaf, only three were successful as the rest could not meet the fund's requirements," said Minister Ncube, without naming the companies.
He said following the development, Cabinet at its Tuesday meeting agreed to consult CABS with a view to relaxing some of the requirements.
"We agreed as Cabinet to go back to CABS so that we could relax some of the requirements in order for more companies to qualify for the fund," said Minister Ncube.
He said the companies that had been turned down would have to re-apply once the rules and regulations governing the disbursement of the fund had been revised.
"The companies that were not successful should wait until we revise the rules and regulations and then re-apply," he said.
Minister Ncube said only companies operating normally could meet the set rules and regulations.
"This contradicts the very essence of Dimaf. It is like going to the doctor for treatment and the doctor tells you that he can only treat you if you are in good health," said Minister Ncube.
He said his ministry was treating the issue as a matter of urgency and would get back to Cabinet in two weeks' time after consulting CABS.
Three weeks ago, the Government shortlisted Bulawayo companies earmarked to benefit from the $40 million fund.
However, businesses in Bulawayo expressed concern over the criteria used to shortlist the companies, saying the disbursement of the fund had a bias in favour of big companies.
They also demanded the publication of the companies that would benefit from Dimaf to promote transparency and avoid abuse of the funds.
A number of city industries are reported to have failed to reopen after the festive holidays due to viability constraints.
Most businesses are pinning their hopes on the fund to revamp their operations after closing shop due to operational challenges.
Bulawayo has experienced increased job losses in the past years that have been attributed to the closure and relocation of companies to other cities, especially Harare.
In an interview yesterday, Minister of Industry and Commerce, Welshman Ncube said Cabinet had agreed to hold discussions with the disbursing agent, CABS, with a view to relaxing some of the Dimaf rules and regulations in order for more companies to benefit from the fund.
"Out of the 60 companies that applied to benefit from Dimaf, only three were successful as the rest could not meet the fund's requirements," said Minister Ncube, without naming the companies.
He said following the development, Cabinet at its Tuesday meeting agreed to consult CABS with a view to relaxing some of the requirements.
"We agreed as Cabinet to go back to CABS so that we could relax some of the requirements in order for more companies to qualify for the fund," said Minister Ncube.
He said the companies that had been turned down would have to re-apply once the rules and regulations governing the disbursement of the fund had been revised.
"The companies that were not successful should wait until we revise the rules and regulations and then re-apply," he said.
Minister Ncube said only companies operating normally could meet the set rules and regulations.
He said his ministry was treating the issue as a matter of urgency and would get back to Cabinet in two weeks' time after consulting CABS.
Three weeks ago, the Government shortlisted Bulawayo companies earmarked to benefit from the $40 million fund.
However, businesses in Bulawayo expressed concern over the criteria used to shortlist the companies, saying the disbursement of the fund had a bias in favour of big companies.
They also demanded the publication of the companies that would benefit from Dimaf to promote transparency and avoid abuse of the funds.
A number of city industries are reported to have failed to reopen after the festive holidays due to viability constraints.
Most businesses are pinning their hopes on the fund to revamp their operations after closing shop due to operational challenges.
Bulawayo has experienced increased job losses in the past years that have been attributed to the closure and relocation of companies to other cities, especially Harare.
Source - TC
