China Development Bank Opens $30 Million Credit Line for Zimbabwe SMEs
Small and Medium Scale Enterprises Minister Sithembiso Nyoni said businesses can apply right away to access Chinese credits
Loans at a 10 percent annual interest rate repayable over five years will be disbursed by the Infrastructure Development Bank of Zimbabwe and one third of the total $30 million will go to capital investment The China Development Bank has made a US$30 million line of credit available to small and medium-sized Zimbabwean businesses many of which are short of capital. The Infrastructure Development Bank of Zimbabwe will disburse the facility, sources said. Loans will be available at a 10 percent interest rate with repayment over five years. One third of the total has been set aside for capital investment such as new plant. Small and Medium Scale Enterprises Minister Sithembiso Nyoni said businesses can apply right away to access the facility. “SMEs provide about 90 percent of jobs in Zimbabwe and so it is commendable that China is supporting this sector which is driving the country’s economy.” But economic commentator Rejoice Ngwenya said Chinese credits have a tendency to benefit loyalists of President Robert Mugabe's ZANU-PF. “Most of these Chinese loans are abused by politicians" and flow to ZANU-PF backers, Ngwenya said. One small business operator who requested that he not be named told reporter Jonga Kandemiiri that stringent bank requirements make such credits inaccessible. Meanwhile, lawmakers Wednesday were threatening to block passage of the budget for 2012 if the government does not pay them outstanding allowances dating to 2008, VOA Studio 7 correspondent Irwin Chifera reported from Parliament. Finance Minister Tendai Biti will present the budget Thursday.