Govt avails $30m loan facility for looted businesses
The government will next week roll out a $30 million loan facility to assist businesses that were looted and destroyed during January’s violent protests.
The violence that accompanied the January protests mostly affected businesses in the western areas that lost their stock and property worth millions of dollars.
Addressing affected businesspeople and captains of industry at a dinner organised by the Grain Millers Association of Zimbabwe in Bulawayo on Thursday, Minister of Industry and Commerce, Mangaliso Ndlovu said as per agreement with businesses, the money would be given directly to the suppliers.
“But there’s a process that has to be followed and the money paid upon production of an invoice we will be having a dialogue with suppliers because there might be a delay of a week or two between supply and payment. We want to make sure that period is as short as possible,” he noted.
The minister insisted that the facility was meant to keep businesses afloat and was not compensation.
He added that businesses were also free to approach the banks as another funding option.
Those who sought compensation should pursue channels availed by legal statutes to approach the organisers of the violent demonstrations, as they are responsible and liable, Ndlovu said.
“We don’t anticipate any defaulting and because we are dealing with our esteemed business community, for now, we will find ways of recovering our money should we realise that there are distress signs. Some businesses have begun operating so they do not necessarily need to take the amount they submitted but just apply for what is needed,” he advised.
Minister Ndlovu added that for transparency, regional offices, as well as ministers of state, have a full list of the businesses that registered their losses, accompanied by police reports and were open for anyone to see in the event some felt procedures were flouted.
He added that only registered businesses would benefit but had advised his team to assist unregistered businesses who had suffered loses as long as they are willing to formalise their companies.
“We do not want to be seen to be awarding non-compliance so we encourage particularly the small to medium enterprises to really formalise their business. We expect this facility to be operational by mid next week. I have instructed my team to work around the clock to make sure that by mid next week the beneficiaries begin to access the facility,” said Minister Ndlovu.
“There are issues that we have to deal with and much are administrative issues as the loan agreements have to go through its due peer review systems including the attorney general. I’m told that has since been done.”
As for the highlights of the loan, the minister said those who want to restock, they would pay back the loan within three to six months and it attracts a concessionary interest rate of four percent per annum.
“There will be a two month grace period before you start repaying so, in essence, there is a five to eight months repayment period. Those who lost equipment and wish to replace will be paid an interest rate of three percent per annum and have 12 to 24 months to repay. Those who lost their building during the process will access funding at a concessionary rate of two percent per annum and will have a 10 to 15 repayment period,” he explained.
Ndlovu said as noted, the interest rate charged was not a way of making money out of the facility but just enough to cover its transaction costs.
“I wish to highlight that it is very important those who access this facility prioritise repaying. We have had instances where generally we see government interventions as free money. We will put tight military mechanisms on this facility because we expect businesses to adhere to basic business principles.”
He added: “We regard those people who submitted their names and estimates during that time when no one knew there was going to repayment or relief coming as having done so without having any expectations. It is therefore not going to be possible for us to receive any new applications because we want to avoid manipulation of the process. It is important that we have adequate control measures as we implement this.”