Bank HQs in Byo

Industry and Commerce Minister Professor Welshman says the taskforce on ‘Let Bulawayo Survive’ has finished preparing a report to be presented to Cabinet with decentralisation of banks flagged as key for the revival of struggling firms in the city.

Welshman Ncube
Welshman Ncube

The development follows revelations that captains of industries are lobbying for the revision of the Banking Act with the view of having some banks being headquartered in Bulawayo.

“In the report that we have prepared, we made strong recommendations around the issue of accessing lines of credit, where it was noted that the location of banks in Harare is a major obstacle for Bulawayo firms seeking financial assistance.”

In separate interviews, Confederation of Zimbabwe Industries (CZI) Matabeleland chapter president, Dr Ruth Labode, said the fact that all the financial institution were headquartered in Harare was hindering companies located outside the capital from accessing funds to recapitalise their operations.

“We are aware that Government is making frantic efforts to deal with closure of companies particularly in Bulawayo, and as key stakeholders we think accessing working capital by companies will solve the problems.

“As part of our contributions to the revival of industries, we have therefore proposed that the banking act should include issues to do with location to avoid this current scenario where every bank is based in Harare yet Bulawayo is regarded as the country’s industrial hub,” she said.

Dr Labode said if banks were decentralised, local firms would be able to apply successfully for loans.

“The current situation is that even if a Bulawayo company is applying for a loan as small as US$5 000 they will have to make an application to Harare where banks are headquartered and that normally causes a lot of problem,” she said.

Zimbabwe National Chamber of Commerce past president, Obert Sibanda, echoed the same sentiments that decentralisation of banks was critical for the recapitalisation of firms.

“What is almost possible is to revise the criteria of licensing of banks, maybe to say that so many licences are set aside for financial institutions willing to operate and invest in some of the country’s major cities apart from Harare.

“If such a policy is put in place as we are lobbying for, the country will have health banking environment were some banks would be based in Bulawayo and having authority to grant loans to firms.”

Sibanda said it was also imperative for Government to encourage banks to empower their branches with lending powers.

Over 87 companies in Bulawayo have shut down operations citing the inaccessibility of credit lines as the major contributory factor in the demise of industries in the city, which have also seen over 20 000 people losing their jobs.

Post published in: Business

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