Lack of collateral affects young miners

06 Mar, 2022 - 00:03 0 Views
Lack of collateral affects young miners Dr Chamu Chiwanza

The Sunday News

Judith Phiri, Business Reporter

THE requirement of collateral to access cash loans has been viewed as a stumbling block to young miners who are in need of capital to boost their production.

In a lending agreement with banks or financial institutions, collateral is a borrower’s pledge of specific property to a lender, to secure repayment of a loan. 

Businessman Dr Chamu Chiwanza who is also the Young Miners Foundation patron said the requirement of collateral was affecting young miners’ need to mechanise their operations.

“There is a need to find structures to mechanise young miners because most of them do not have the collateral required to access loans. 

“So, we had some discussions with some investors to say why can’t we use what they (young small-scale miners) produce as collateral if they are in production. 

For example, to say if these young miners are producing 200 to 400 grammes a week, use their production as a means of collateral. 

“That has to be used as their collateral as a security, so that they can access cash loans for mechanisation and upscaling of their operations so as to boost their production,” said Dr Chiwanza.

He said the idea was slowly being entertained, but there was a need for regulation of   such a policy from the Ministry of Mines and Mining Development for it to be fully adopted. 

Dr Chiwanza said the Second Republic was making great efforts to review mining policies which were drafted during the colonial era to suit the colonisers.

He said when he was president of the Affirmative Action Group (AAG), they tried to lobby for change of the policies, particularly the mining policies. 

He said there was a need to find ways of putting security on young miners without actually asking them to produce title deeds as they could possibly be able to raise funds from other markets like the stock exchange.

Dr Chiwanza said young miners were the future of the mining industry in Zimbabwe and the country’s exports growers.

YMF chief executive officer Mr Payne Kupfuwa said there were various opportunities for the young small-scale miners to create wealth and develop the country, while complementing the Government’s US$12 billion mining industry target by 2023.

He said they were working on formalising young artisanal and small-scale miners so as to upscale them into formalised medium scale miners.

“Our aim as young miners is to positively contribute to the realisation of a US$12 billion mining economy target which should see Zimbabwe edging closer to the goal of being an upper-middle income country by 2030. This can be achieved by working together with strategic partners to formalise and grow young miners’ enterprises into professional medium scale entities so that they boost their production capacities,” said Mr Kupfuwa.

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