Business / Local
Bulawayo firms beg for debt reprieve
31 Mar 2016 at 00:34hrs | Views
BULAWAYO province has appealed for a Presidential protection on ailing companies and a waiver on interest charges levied on them by financial services to facilitate economic recovery.
Provincial Minister of State Nomthandazo Eunice Moyo presented the request to Acting President Phelekezela Mphoko during a briefing at the Mhlahlandlela Government Complex in the city yesterday.
"Honourable Acting President our industries here are seriously indebted to banks. This is a major handicap when talking about growth because we've to pay back debts before we talk about resuscitation," said Minister Moyo.
"Most companies in Bulawayo are under liquidation and we urge your intervention on that. We need a depositors' protection for companies and request a Presidential waiver on interest charges for industries in Bulawayo to survive.
"We request that interest rates be reduced to five percent from 36 percent, which is too high given the present situation in industry."
Several companies are struggling to remain afloat because of the debt burden while some have lost properties and equipment worth millions of dollars to creditors after they failed to pay back the monies borrowed.
This has made it difficult for surviving companies to access fresh lines of credit, which has hampered recapitalisation efforts, Minister Moyo added.
She stressed the need to retool the city's industry given the bulk of machinery used was old and costly to maintain.
The minister said businesses in the city needed a fresh production model that incorporates the growing small to medium enterprises.
"We need to look into these issues while at the same time ensuring that small to medium enterprises are growing," she said.
The minister also complained to the Acting President over delays by Treasury in paying companies that rendered services in the run up to the 2014 regional youth games that were hosted by Bulawayo.
"It's almost two years now and companies who provided services haven't been paid. Some of these people took loans from banks and they're losing their business and this is a painful situation," she said.
"I've talked to concerned ministries before and request you to push these people to pay our companies quickly. Now people are saying that if it were Harare companies they would have been paid way back. We need this to be addressed as soon as possible."
Provincial Minister of State Nomthandazo Eunice Moyo presented the request to Acting President Phelekezela Mphoko during a briefing at the Mhlahlandlela Government Complex in the city yesterday.
"Honourable Acting President our industries here are seriously indebted to banks. This is a major handicap when talking about growth because we've to pay back debts before we talk about resuscitation," said Minister Moyo.
"Most companies in Bulawayo are under liquidation and we urge your intervention on that. We need a depositors' protection for companies and request a Presidential waiver on interest charges for industries in Bulawayo to survive.
"We request that interest rates be reduced to five percent from 36 percent, which is too high given the present situation in industry."
Several companies are struggling to remain afloat because of the debt burden while some have lost properties and equipment worth millions of dollars to creditors after they failed to pay back the monies borrowed.
This has made it difficult for surviving companies to access fresh lines of credit, which has hampered recapitalisation efforts, Minister Moyo added.
She stressed the need to retool the city's industry given the bulk of machinery used was old and costly to maintain.
The minister said businesses in the city needed a fresh production model that incorporates the growing small to medium enterprises.
"We need to look into these issues while at the same time ensuring that small to medium enterprises are growing," she said.
The minister also complained to the Acting President over delays by Treasury in paying companies that rendered services in the run up to the 2014 regional youth games that were hosted by Bulawayo.
"It's almost two years now and companies who provided services haven't been paid. Some of these people took loans from banks and they're losing their business and this is a painful situation," she said.
"I've talked to concerned ministries before and request you to push these people to pay our companies quickly. Now people are saying that if it were Harare companies they would have been paid way back. We need this to be addressed as soon as possible."
Source - chronicle
