The Sunday News
Shepias Dube Business Reporter
A LOCAL insurance company, First Mutual Life, has designed a product which is meant to empower small-scale miners who have been marginalised by many financial lending institutions.
Addressing delegates at the Zimbabwe Mining Federation (ZMF) conference in Bulawayo on Friday, company consultancy service manager Mr Egan Mkahanana said the facility was tailor-made to meet the needs of the small scale miners.
“As First Mutual Life Insurance, we have created a product insurance which enables you as miners to approach financing institutions which can now freely provide you with loans in the knowledge that there is credit insurance that First Mutual will provide,” said Mr Mkahanana.
He said the decision to come up with this product was reached after realising that a lot of financiers were reluctant to release funds for the recapitalisation of small scale miners because most of them did not have collateral security.
“A lot of you have been constantly looking for loans for operation purposes and infrastructure development but at the end of the day the question always comes, do you have collateral? We are glad to tell you that that this is a gap we have come to fill,” he said.
He said the credit insurance covers the risks of death in the mining industry.
Mr Mkahanana said in the event that the principal borrower should die before they pay down their loan First Mutual would step in and pay the balance of the loan that is outstanding to the financial institution.
The consultant services manager said the facility also included cases of disability which were rife and common in the mining industry.
“Our credit insurance facility also include injuries and disabilities because once the borrower is disabled the assumption is probably they had lost their ability to mine and generate in come to then repay the loan,” he said.
He said for this facility to work to the advantage of miners, they have to be in groups so they can get cover without going for inconvenient medical check-ups.
Mr Mkahanana said risks were more manageable when dealing with groups than with individuals.
“When people approach us as individuals we as insurance companies are relaxed to give insurance cover without first proving that the individual concerned has good health. But when we deal with groups we feel more comfortable and then be able to provide this kind of insurance without really asking for medical requirements,” he said.
He however, said the credit insurance can either be done predominantly with micro finance institutions directly or through organised groups such as the (ZMF).
He said the average premium that is payable was about $1,60 for every $1000 worth of loan.
Mr Mkahanana said his company will continue working with Government and ZMF leadership to ensure that this arrangement was well structured.
Meanwhile, Mines and Mining Development deputy minister Cde Fred Moyo said the coming in of the private sector to capacitate small scale miners was a positive move which would ensure growth and efficiency of small-scale miners.
“As Government we welcome this move and we urge miners to seize this opportunity to grow your enterprises and make meaningful contribution to the economy,” he said.
