THE Zimbabwe Artisanal and Small-Scale Miners’ Council (Zasmc) is negotiating with the Bankers’ Association of Zimbabwe (BAZ) over a loan facility to fund the operations of small-scale miners, an official has said.
GAMMA MUDARIKIRI OWN CORRESPONDENT
Zamsc president Wellington Takavarasha told Southern Eye Business yesterday that the council was hopeful the negotiations would be concluded soon.
“We are in talks with the Bankers’ Association of Zimbabwe and are optimistic that we are going to come up with a package for small-scale miners,” he said.
“The banks are beginning to realise the full potential of small-scale miners’ sector and its contribution to the fiscus.”
Negotiations with BAZ come hard on the heels of the collapse of a loan facility deal between Zasmc and Allied Bank.
Takavarasha said banks had been reluctant to lend to small-scale miners largely due to lack of collateral and the high risk factor associated with the small scale operations.
BAZ president chief executive officer Sijabuliso Bayam although not confirming the negotiations, said his organisation had an initiative not only to finance small miners but other small-to-medium enterprises across all the sector of the economy.
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“We are dealing with structures of various small-scale businesses across the sectors of the economy to see possible ways on how we can finance their businesses,” he said.
“I will be meeting not only the president of small scale miners tomorrow (today), but also other small scale business operators’ structures.”
Bankers say financing small scale miners is not profitable considering the high risk of default in a market battling with tight liquidity.
“What most people miss is that banks are in business for profit, if it was lucrative to finance small-scale miners banks would fall over each other to fund them, ” one banker said.
“There is the general shortage of liquidity in the economy and there is simply not enough money, so every sector feels as if banks are reluctant to finance them.
Economic analyst Godfrey Kanyenze recently said banks cannot be blamed for refusing to lend to small-scale miners as some players were of no fixed abode being transient and unregistered.
He said the first step would be for the 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. Twitter feedback @mudarikirig
