The manufacturing sector loan requirements have been revised upwards to US$ 5 billion from US$2 billion due to an increase in demand for loans from companies in need of fresh funds to purchase new machinery.
As several companiesÂ seek capital to recapitalise operations, it has emergedÂ that there is a rise in demand for loans in a move that has resulted in the local financial industry, Afreximbank, the PTA bank andÂ AfricanÂ DevelopmentÂ BankÂ reviewing upwards their loanÂ requirements for local manufacturingÂ firms.
The move is expected to result in the government also stepping up efforts to seek additional funds to ensure that industry can access capital required to boost the availability of locally produced goods.
Zimbabwe Economic Policy Analysis and Research Unit Executive Director, Dr Gibson Chigumira revealed that the rise in the demand for loans is mainly as a result of industryâ€™s capital constraints that are also affecting key economic sectors.
â€œThis is a true reflection of the situation on the ground where there is inadequate funding for industry to the extent that more needs to be done on such an issue,â€ Dr Chigumira said.
While information from the central bank shows that total bank deposits have increasedÂ from US$400 million as of February 2009 to US$2,3 billion byÂ December last year, the banking industry is experiencing challenges in providing adequate loans for industry on the back of low savings from industry and households.
Most companies are therefore focusing on joint venture with regional and international investors to unlock capital that is required to purchase new machinery.