The Sunday Mail
Enacy Mapakame
AFRICAN Century Leasing (ACL) has reserved $32 million in asset funding for start-up businesses, up 33 percent from a year ago.
The institution recently opened a micro-finance bank for small to medium enterprises (SMEs).
Last year, they advanced more than $24 million to small businesses.
ACL chief executive, Mr Stanley Matiza said the institution “was financially healthy” with a total $42 million available for lending to both SMEs and non-SME borrowers.
Transport and agriculture will take up a bigger chunk of the loans.
There will, however, be a bias towards mechanisation.
Emphasis on mechanisation in the agricultural sector is meant to enhance production and food security.
“We have decided to increase our funding this year, we can afford to do so.
“We are adequately funded. Others struggle to raise the money but we do have the resources. We want to spread our branch network, especially in rural areas and small towns where there is a lot of economic activity.
“Our aim is to improve on financial inclusion as well,” said Mr Matiza.
ACL is funded by development finance institutions such as the Dutch Development Bank, Responsibility and the Africa Enterprise Challenge Fund (AECF). lt is expected to rope in two additional foreign funders this year.
Currently, the institution has two micro-finance branches in Harare’s Avenues and Machipisa. Five more branches will be opened before year-end. Financial institutions have been struggling to tap into the informal sector, particularly in rural areas. Mobile money is offering some relief.
During the clean up exercise that was launched by the Reserve Bank of Zimbabwe (RBZ) in 2004, the closure of some banks dented the reputation of the banking sector.
Since then, banks have been trying to reclaim public trust.
ACL boasts of an $11 million capital base against the minimum requirement of $5 million for a micro-finance bank.
“We are in a healthy position. Since we opened doors, we disbursed US$68 million without taking any deposits. The market can have confidence in us,” said Mr Matiza.
“We are dealing with genuine business people who have a desire to pay back because they understand we are in business. In addition to that, we do asset funding, so there is guarantee production will take place and repayments done,” he added.
While the banking sector has been plagued by high non-performing loans (NPLs), ACL’s NPL ratio was at 6 percent as at December 2015 against the sector’s average of 14,27 percent as at September 2015, according to Treasury statistics.
