SW Radio Africa (London)

Zimbabwe: Chinamasa Accuses Banks of Sabotaging Economy

Finance Minister Patrick Chinamasa has laid the blame for the country's poor economic performance on the banking sector, according to reports.

The minister told delegates at an economic outlook symposium held at the Mandel Training Centre in Harare, that the banks' reluctance to give loans to fund the country's informal sector was akin to imposing sanctions on the economy, the Newsday reported Friday.

"We cannot have a situation where the majority of our population has little access to the economy and no access to capital.

"They used to organise lines of credit of up to $800 million, but now it is down to $40 million a year which is suggesting they are strategising an exit out of our economy. I get this feeling that these banks are imposing sanctions onto their own country," the paper quotes Chinamasa as saying.

But Harare-based economist Godfrey Kanyenze said banks cannot be blamed for refusing to lend to 'an underground sector'.

"Some operators in that sector are of no fixed abode, are transient and unregistered. Some don't keep books or records and so how are banks expected to lend to them.

"Any financial institution will be reluctant to support that which is not above board," Kanyenze said.

He said the first step will be for government to organise this sector through regulation that will promote the players through business development services so that they can transition into the formal sector.

"Banks require collateral from anyone who borrows, and the majority of people in the informal sector do not have this and it is the duty of government to organise this sector before banks can be asked to step in," Kanyenze added.

Last week, another ZANU PF official, Themba Mliswa, criticised banks for refusing to lend to the country's new farmers on the basis of the government's 99-year farm leases.

Bankers however insist that the leases do not constitute secure land tenure, and lending to farmers on the basis of the document will expose the institutions in the event of defaults on repayment.

Ads by Google

Copyright © 2014 SW Radio Africa. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.