Tight lending conditions have scared off the business community from borrowing the US$100 million Zimbabwe Economic and Trade Revival Facility resulting in relevant authorities considering relaxing requirements for the scheme.
The fund is being financed by the African Export and Import Bank (Afreximbank).
According to information compiled by the Confederation of Zimbabwe Industries (CZI), there has been a low uptake of the facility as several manufacturing companies are failing to comply with the tight requirements in the form of collateral through immovable assets, high interest rate regime of 11% at three years and a three month loan consideration period, among others.
In an interview, Afreximbank Regional Manager for Southern Africa, Mr Gift Simwaka said the institution is now in talks with the treasury to ensure that lending conditions for the facility are relaxed.
â€œIndeed the funds have not been accessed and we are now engaging the government,â€ said Mr Simwaka.
Mr Simwaka added that Afreximbank is concerned with the slow uptake of the loan facility, yet manufacturing firms are reeling under cash flow constraints.
â€œWe know the situation and we want to improve the state of industry,â€ he added.
The facility was launched in August last year to facilitate the recovery of the manufacturing industry through the provision of loans at concessionary rates.
It is aimed at financing the acquisition of equipment and capital goods for use in improving the quality of goods and services.