The Reserve Bank of Zimbabwe (RBZ) is currently working with the banks to find ways of increasing long term cheaper financing to cushion companies, an official has said.
Responding to questions from journalists in Bulawayo on the sidelines of ZimTrade export financing awareness seminar yesterday, RBZ deputy governor Kupukile Mlambo said there was need to have long term money in the economy for the betterment of the industry.
Mlambo said most of the deposits in banks were short-term in nature and as such could not be disbursed as long term financing.
“So they can’t lend it out for one year or two years in case the owner of the money comes and say I want my money. But if we had long term money like for example you have what is called time deposits, the bank can lend (because) they know that they have got enough time for them to lend out and then call bank that money when they need it,” he said.
“So we are working with the banks now to find ways of increasing the long term money, which will be cheaper and have longer term to pay. We are trying to find ways, but we have to understand that as long as we have short term money, it’s always been expensive.”
Speaking at the seminar, RBZ financial markets director, Azvinandaa Saburi lamented low uptake of the $70 million export finance facility meant to cushion exporters and make them more competitive in the foreign markets.
“As Reserve Bank, we have put up several facilities including the revolving export finance facility for $70 million and this was put in 2017 which is demand-driven. If you have noticed, I think the gold facility we started at $20 million, we are now at $150 million because the gold producers have fully utilised the fund, the export facility was established last year and it has not been fully utilised,” Saburi said.
“So once we reach the limit of $70 million, obviously we would be able to consider or we will look for more funds so that we increase the amount of the facility,”
Mlambo told NewsDay that the low uptake was due to a gap between the public and banks.
“Although it’s open to all banks, some banks are not availing it to their customers and this is what we are hearing here in the meeting that when they go to their banks they are told it’s not been finalised,” Mlambo said.
“But I can tell you that it has been finalised, but remember that banks have also their own money which they want to lend out and they may want to lend their money first. I think so, because this is what I am hearing here. But really, low uptake is because of the gap between the public and the bank. This is our job now as the central bank to try and close that gap.”