Tendai Charumbira
Suspension of lending by banking institutions, building societies, development finance institutions is likely to fuel an already grown unemployment rate as some of the lending institutions are closing down business as a result of suspension of their activities by the Reserve Bank of Zimbabwe (RBZ) on May 9.
In an interview with TellZim News, chairperson and director of Theo Cash Capital Tamuka Mutinhima said the indefinite suspension has affected them as lending is their everyday business and as a result they are going to close their business.
“The suspension of lending institutions has affected us to the last point because lending is our core business there is no way we can survive, so we are going to close shops. As for our employees, it means they are going to lose their jobs because will we not have the money to pay them their salaries,” said Mutinhima
Success Microfinance Bank Masvingo operations officer Farai Gamira said the directive by RBZ affected them as their business is mainly focused on loans so by suspending lending, they have killed the business itself as most of the revenue comes from interest income.
“It is affecting us because our business is mainly dominated with loans, so by suspending they have suspended the live blood of the bank as major activities of the bank include lending and most of revenue from banks comes from lending. As it stands we don’t have anything,” said Gamira.
He added that they are waiting for the RBZ to tell them on what to do next whether to continue or they should stop as they believe that more lending is leading to high exchange rates.
“We are now waiting for the RBZ to give us further directives and inform us whether we should continue with business or we close as they believe that more lending is leading to high exchange rates on the streets,” he added.
Donald Chikwira, branch manager of CJ kitchens said that as they are failing to understand the decision as they (RBZ) are using a lot of jargon in their communications.
“It’s all speculative at the moment as they are using a lot of jargons people are failing to understand how it is going to work yet there is no Statutory Instrument to regulate that,” said Chikwira.
However, a worker at one company that sells goods on credit said that the suspension of lending is not going to affect them as they also sell their products on cash.
“If the issue of trading in credit is blocked as is the case right now, that will not be major problem to us as we can always revert to cash sales on our products as an alternative,” said the employee who chose to be anonymous.
The indefinite decision by government through RBZ came hot on the heels of high levels of inflation destabilising most businesses that out of panic resorted to marking prices in foreign currency even on locally-produced goods leaving the general populace in quandary.
