The Sunday News
Noble Ncube, Business Reporter
THE country’s Micro Finance Institutions (MFIs) have welcomed the pending introduction of bond notes but noted the need for an informative educational programme for the public to successfully appreciate the move by the Government.
In an interview, Zimbabwe Association of Microfinance Institutions (Zamfi) executive director Mr Godfrey Chitambo said MFIs appreciated the idea of bond notes but noted that scepticism among the public, who think the introduction of the notes was a backdoor move to re-introduce the Zimbabwean dollar, must be dealt with.
He said the Government has an obligation to clarify its intention to the people as most macro businesses had understood the concept of bond notes.
“As Zamfi, we understand the logic of bond notes. We are afraid that there might be a temporary resistance from the public.
People are afraid of what might happen because no one wants that situation of a black market. We do not want a scenario whereby the bond note is being traded for a certain rate against other currencies. If it is going to be at par with the American dollar then so be it.
“We are therefore asking the authorities for a proper time frame as to when the bond note will be introduced so that there is no panic in the market. The timeline must be clear. People need to be educated whether the bond notes will be for use by exporters or everyone in general. Zimbabweans are fairly educated,” he said.
On the issue of cash liquidity and its effect on MFIs, Mr Chitambo said the squeeze was affecting operations in a negative way.
He said the majority of their clients were low income earners who always wanted to use cash to purchase.
“Liquidity is affecting MFIs a lot. However, as MFIs we believe we will come up with solutions. The majority of our clients need cash at hand for various purposes. So as a result of cash shortages and the call for financial inclusion we are trying to embrace technology. We are in the process of encouraging cashless transactions with our clients. The repayments are already coming through mobile payments,” said Mr Chitambo.
The Government has been encouraging the public to utilise cashless transactions such as swiping at Point of Sale (POS) machines, mobile payments and limited the amount of hard cash cross border traders can carry around or when travelling outside the country.
MFIs play a major role in the implementation of this proposal because they offer loans and other financial services to the public at large.
Mr Chitambo said it was imperative for MFIs to offer products that are in line with the prevailing financial conditions.
He said players in the industry needed to reach out to the informal sector and the marginalised rural clients who needed the services.
He said through this MFIs will be playing a role in rejuvenating the local economic landscape and empowering the masses.
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