tendai biti 26-11-10.jpgFinance Minister Tendai Biti’s proposal to bail out Renaissance Merchant Bank with a US$20 million loan from the National Social Security Authority (NSSA) is likely to hit a snag as cabinet and key stakeholders are rejecting the proposal.

Efforts by Mr. Biti to bail out embattled businessman Patterson Timba’s Renaissance Bank by directing NSSA to give a US$20 million loan to the bank have raised more questions than answers amid revelations that cabinet, industry and households are against the proposal.

The proposed plan is also reported to have been met with resistance from NSSA’s parent Ministry of Labor and Social Welfare which has argued that funds from the authority cannot be used to rescue the bank at a time when its key contributors, government workers, are struggling due to low disposable incomes.

Sources say a lot is happening behind closed doors after Mr. Biti discovered that his plan to unethically bail a friend was exposed.

Patterson Timba is brother to Jameson Timba who is an MDC-T Deputy Minister in the inclusive government.

NSSA Board Chairman, Innocent Chagonda is Biti’s close associate and has represented the MDC-T in some legal cases.

An industrialist, Mr. Patrick Gwasera says Mr. Biti’s credibility is now questionable after soiling his hands in the Renaissance Bank saga.

“We are not really aware of what is happening but this is surely disgruntling on the Minister’s credibility,” said Mr. Gwasera.

An economic commentator, Mr. Danny Masukuma called on Minister Biti to focus on economic revival rather than playing political tricks with taxpayers’ funds.

Minister Biti’s proposal has also come under fire with stakeholders raising concern on whether Renaissance Bank will put into good use NSSA funds after revelations that the troubled bank’s financial crises are due to mismanagement.

Renaissance Merchant Bank was exposed to the liquidity crunch by the Reserve Bank of Zimbabwe this month after investigations by the central bank showed that its founding director Patterson Timba allegedly failed to repay a US$12 million loan to business tycoon Jahesh Shah meant to recapitalise the bank in a bid to save the financial institution from collapse.

 

Timba is also alleged to have bypassed the central bank by going directly to Mr. Biti with a proposal for a rescue loan.