ZB Holdings plans to increase its services to the informal sector as the group has proved to be a low default risk when it comes to loan repayments.
ZB Holdings business development manager Shadowsight Chiganze said informal traders’ contribution to the group had been positive. He said as at March 25, there were 5 989 informal trader accounts with total deposits of $1 088 399.
He said the group had advanced a total of 218 microfinance loans to the sector with a total value of $846 630 and has disbursed 33 weekend loan facilities with a value of $17 100.
Chiganze said with 853, Gazaland in Harare has the highest number of informal trader accounts followed by Siyaso with 527 and Glenview 483, also in the capital. He said the group was set to expand its services to Norton.
“We have had a very low default rate due to the structures and risk mitigation we have put in place. Ultimately, our focus has been on quality lending within the informal sector. This has helped us ensure limited default,” said Chiganze.
He said the group had realised that there was a need in the sector for lending and had offered accounts that offered free banking for traders.
“We have realised that this sector is driving economic activity and a lot of business is being conducted through it,” said Chiganze.
“It is through our knowledge of this sector that we have realised that many who operate in the informal sector do not have time to come to the bank, so we have brought the bank closer to them for their ready access.”
Chiganze said the bank would open a new branch in Norton for traders. In December last year, ZB launched a $1 million loan facility for informal traders.
Traders under the facility can access between $100 and $500 that is payable per week.
The Small to Medium Enterprise ministry last week said official statistics show that $7 billion is circulating in the informal sector.