Zimbabwe’s Central Bank Boosts Financial Inclusion with Credit Infrastructure

The Reserve Bank of Zimbabwe plans to develop and maintain a robust credit infrastructure to enhance access to loans for farmers and SMEs

by Victor Adetimilehin

Zimbabwe’s central bank governor John Mangudya announced yesterday that the bank is working towards developing and maintaining a robust credit infrastructure to enhance financial inclusion in the country.


Mangudya was speaking at the Zimbabwe National Chamber of Commerce (ZNCC) Business Review Conference in Harare, which was held under the theme Transforming Economic Realities into Market Opportunities.


He said the bank’s initiative would enable farmers and small and medium enterprises (SMEs) to access loans securitised by movable properties such as agricultural equipment, household goods, livestock, and notarial general covering bonds.


Supporting Productive Sectors


According to a report by Newsday Zimbabwe, Mangudya said the banks continue to support productive sectors of the economy with agriculture, mining, and manufacturing sectors topping the list of borrowers.


“The banks continue to support productive sectors of the economy. Agriculture at 17,7%, manufacturing at 13,82%, mining at 11,74%, and distribution at 13,30% dominate total lending in line with supporting productive sectors,” he said.


He added that the loan-to-deposit ratio has been trending upwards from values below 40% in January 2021 to over 55% in August 2023. The manufacturing and distribution sectors’ loan-to-deposit ratios have surpassed the average for the entire economy.


Calling for Market Efficiency


ZNCC president Mike Kamungeremu said the business fraternity was focused on coming up with solutions that foster private sector-led economic recovery and growth.


He urged the government to create an enabling environment by relaxing regulation in the sector.


“We aspire to continuously provide solutions that foster private sector-led economic recovery and growth. We implore the relevant authorities to allow markets to function at an optimal level. The government should limit its regulations for that to happen,” Kamungeremu said.


He said a conducive operating environment benefited all economic players, government included.


“We will deliver the necessary growth that is required to take us to upper-middle-income status by 2030,” he said.


Zimbabwe is aiming to become an upper-middle-income country by 2030, with a per capita income of at least US$3,500, according to its Vision 2030 blueprint.


The country has been facing economic challenges such as high inflation, low productivity, foreign currency shortages, and power outages, which have affected its growth prospects.


However, the government and the central bank have been implementing various reforms and policies to stabilise the economy and attract investment.


The development and maintenance of a robust credit infrastructure is one of the steps that the central bank is taking to enhance financial inclusion and support economic activity.

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