Business / Local
Local firms cry foul as only one Dimaf application is approved
20 Mar 2012 at 23:14hrs | Views
ONLY one Bulawayo company has had its application for funding under the Distressed Industries and Marginalised Areas Fund approved. Most other organisations have failed to meet the stringent requirements by CABS, which entered into an agreement with Government to disburse the money.
Industry and Commerce Permanent Secretary Ms Abigail Shonhiwa said Government had engaged the building society to relax the requirements.
Over 60 companies from Bulawayo had indicated their need for assistance to Government last year due to shortages of finance to recapitalise their operations after the decade-long recession in the country.
Government entered into a partnership with CABS and Old Mutual to provide US$40 million to companies in Bulawayo.
"A number of them (companies) indicated the conditions were stringent. By the time we made a follow-up, it was clear that no disbursement had been concluded.
"Others indicated they had not received a positive response because the requirements were stringent," she said.
Ms Shonhiwa said only one pharmaceutical company had its application approved.
She said Industry and Commerce Minister Professor Welshman Ncube had briefed cabinet on the developments and was tasked to engage CABS so that some of the conditions were relaxed.
The building society's requirements include provision of collateral, audited accounts for the past two years and interest rates in the region of 15 percent a year.
Ms Shoniwa said CABS had shown willingness to relax the conditions for small-to-medium enterprises, although this would not apply to listed companies.
"Indications are that they have shown some flexibility on the interest rate and collateral but there is no movement on companies listed on the Zimbabwe Stock Exchange."
Director for Enterprise Development in the ministry Mr Stanislaus Mangoma, said of the US$40 million provided for the facility, the Government had pledged US$20 million. A further US$10 million was provided for in last year's budget, although nothing had been disbursed yet.
Ms Shonhiwa said a number of companies countrywide had inquired about the availability of the funds to assist their operations.
She said companies from other provinces were being assisted under the Zimbabwe Economic and Trade Revival Facility, funded to the tune of US$100 million, under a partnership between Zimbabwe and the Afreximbank
Industry and Commerce Permanent Secretary Ms Abigail Shonhiwa said Government had engaged the building society to relax the requirements.
Over 60 companies from Bulawayo had indicated their need for assistance to Government last year due to shortages of finance to recapitalise their operations after the decade-long recession in the country.
Government entered into a partnership with CABS and Old Mutual to provide US$40 million to companies in Bulawayo.
"A number of them (companies) indicated the conditions were stringent. By the time we made a follow-up, it was clear that no disbursement had been concluded.
"Others indicated they had not received a positive response because the requirements were stringent," she said.
Ms Shonhiwa said only one pharmaceutical company had its application approved.
The building society's requirements include provision of collateral, audited accounts for the past two years and interest rates in the region of 15 percent a year.
Ms Shoniwa said CABS had shown willingness to relax the conditions for small-to-medium enterprises, although this would not apply to listed companies.
"Indications are that they have shown some flexibility on the interest rate and collateral but there is no movement on companies listed on the Zimbabwe Stock Exchange."
Director for Enterprise Development in the ministry Mr Stanislaus Mangoma, said of the US$40 million provided for the facility, the Government had pledged US$20 million. A further US$10 million was provided for in last year's budget, although nothing had been disbursed yet.
Ms Shonhiwa said a number of companies countrywide had inquired about the availability of the funds to assist their operations.
She said companies from other provinces were being assisted under the Zimbabwe Economic and Trade Revival Facility, funded to the tune of US$100 million, under a partnership between Zimbabwe and the Afreximbank
Source - zimpapers
