HARARE – The Distressed Industries and Marginalised Areas Fund (Dimaf), a $40 million joint facility between the government and Old Mutual to bail out struggling companies, is in limbo after most beneficiary firms failed to repay loans, an official said on Tuesday.
The fund was set up in 2011 as a revolving facility to provide financial assistance to struggling companies outside Harare, especially those in Bulawayo, with the government and Old Mutual, through its subsidiary, Central African Building Society (Cabs) each contributing $20 million to the fund.
But industry and commerce permanent secretary Abigail Shonhiwa told the parliamentary thematic committee on Millennium Development Goals that the government was yet to contribute to the fund and was negotiating to restructure the deal to meet its obligations at a later stage.
“The bank has said the government must put up its share of the funds and we have not been able to do that,” Shonhiwa said.
“We have been in discussions with the bank to see if we can restructure it (Dimaf) so that the bank continues to make the funds available. That process of restructuring has not been finalised.”
Most of the companies that benefited from the fund have failed to repay the loans, she said.
“We have a lot of indebtedness although some companies have done well,” Shonhiwa told the committee.
Local industry requires an estimated $2 billion for retooling and working capital to boost its competitiveness.
– The Source