The Sunday Mail
THE country’s biggest bank CBZ Holdings has urged industry to engage more with lenders in order to forge a mutually beneficial relationship for economic growth.
Banks are largely criticised for failing to provide cheap funds to companies. Until recently when the Reserve Bank of Zimbabwe (RBZ) capped interest rates at 18 percent, the cost of borrowing was as high as 35 percent, forcing industry to default and several companies to go under due to high debts.
CBZ Holdings group chief executive officer Mr Never Nyemudzo recently told businesses during the launch of the CZI manufacturing survey that there was need for industry to appraise banks on their funding requirements.
“When as bankers we do things that are not aligned to business, then they will not achieve the intended purpose.
“Converse with your bankers and see how we can help business move forward. The CZI manufacturing sector survey does not show us where bankers come in or areas of opportunities that are available for bankers on how we can help business so we can improve on competitiveness and sustain their operations,” said Mr Nyemudzo.
He noted that there was need for lenders to have a greater appreciation of specific manufacturing industry needs in order to develop specifically tailored products.
“I hope in the next surveys you will ask what can be done in terms of funding. Do you need to borrow money or to own machinery? These are some of the things we can be interested in as bankers,” he said.
Capacity in the manufacturing sector continues to fall, with the latest statistics showing that it dropped 2,2 percentage points from a year ago to 34,3 percent this year. CBZ advanced more than $1,1 billion in loans and advances in the first six months of the year. Its deposit stock also rose 20 percent to $1,7 billion in the period. On the overall, total deposits in the banking sector jumped 11 percent during the first half of the year.
CBZ’s non-performing loans as at June 30, 2015 stood at 7,2 percent against an industry average of 14 percent.
Permanent Secretary in the Ministry of Industry and Commerce Mrs Abigail Shonhiwa insists that banks have to develop suitable packages for the manufacturing sector in the current circumstances. Financial institutions are cutting back on spending as most firms are finding it increasingly difficult to repay their loans.
“There is the issue of non-performing loans and I know there is Zamco (Zimbabwe Asset Management Company) and other measures in place, but we know a lot of companies are under stress because of these NPLs. Funds have been set aside, for instance Dimaf, companies get this money but are not able to pay (sic).
“Could we get suggestions on how best we can come up with innovations to assist, because companies need money but are failing to repay,” she said.
