Zimbabwe: Artisanal Miners Bemoan Empower Bank Stringent Loan Terms

9 June 2021

MUTARE- State-owned micro-banking unit, Empower Bank's mining fund is inaccessible to most artisanal miners due to prohibitive loan requirements, it has emerged.

The bank was launched in 2018 to effectively support youth economic initiatives at a time privately owned commercial banks were charging exorbitant interest rates on loans.

Speaking at a community meeting under a project- Access to Information, which is being implemented by the Green Governance Zimbabwe Trust (GGZT) in the province in collaboration with the Media Institute of Southern Africa (MISA) Zimbabwe, miners said the terms for accessing the loans were restrictive.

Tinashe Nyamukura, who operates in Nyanga district, called for the upward review of the collateral free threshold pegged at RTG$ 20 000.

"If possible it would be good to make the requirements simple because as it is there are going to be a few takers under this scheme for a grassroots level it is difficult for people to meet those needs. It is mainly focusing on registered miners.

"What can we do with that US$200 as miners to improve our working conditions, really it's nothing we hope government can consider this and review," he said.

Empower Bank requires miners to register as a syndicate, have a valid Environmental Impact Assessment (EIA) plan, geological survey which ascertains mineralization of the area, and provide an annual forecast when submitting in order to get access the finance.

Other requirements include a projection of the Life of Mine (LOM) as well as surface work plans.

Government through the Reserve Bank of Zimbabwe has been supporting artisanal miners as part of efforts to encourage them to deliver gold to Fidelity Printers.

However, Empower Bank official Hillary Nyanhongo, told miners said that these stringent requirements have been set to ensure that loans are channeled towards committed youths with demonstrable interest in mining, and not chancers.

He said the requirements should not be seen as discriminatory, but rather as a tool of ensuring that beneficiaries are committed to the cause of mining and will not default on repayment schedules.

"We need to make sure that there is a demonstrable effort to develop the mining claim and show what levels of development has been inputted in the mine.

"We also audit a lifestyle and status or those funded. We have collateral free loans under 20 000 after this one needs collateral but as a bank we even accept stock card, title deeds or any other collateral," he said.

GGZT director Frank Mpahlo said formalization of the sector was key to leverage the production capacities already demonstrated by the artisanal mining sector whose output has been surpassing large scale producers in the last five years.

"Formalization of the sector is long overdue. Policy reforms must capture contemporary realities of their production which is now trumping large scale miners. The law should respond to such realities," said Mpahlo

On average geological cost around $US300 to US$600, while consultants for an EIA range from around US$600 upwards, charges which appears steep for most miners.

Artisanal miners have a history of absconding; defaulting loan repayment bank ensures that it does not make losses from assisting youths.

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