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Zimbabwe central bank approves MSME facility

Zimbabwe's central bank has approved a US$5.9 million facility to strengthen the participation of micro, small and medium enterprises (MSMEs)…

Zimbabwe’s central bank has approved a US$5.9 million facility to strengthen the participation of micro, small and medium enterprises (MSMEs) in the mainstream economy.In a statement on Tuesday following a meeting of the Monetary Policy Committee (MPC), Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said MSMEs would access the facility, pegged at Z$500 million, “from banks and microfinance institutions at 30% per annum for purposes of enhancing production and productivity across all the sectors of the economy”.

The facility is recognition by the monetary authorities of the critical role played by MSMEs in Zimbabwe over the past two decades.

The bulk of the MSMEs are in the informal sector, which has gained in prominence over the past few years as companies in the formal sector shut down due to the country’s deteriorating economic conditions.

The RBZ expressed satisfaction with the reduction in inflation, which has further fallen from 240.1% in March 2021 to 194% in April 2021. 

“The committee reaffirmed its commitment to sustaining the disinflationary path to the end of the year and expects year-on-year inflation to go down to below 55% by July 2021,” Mangudya said. 

He revealed that the MPC had resolved to maintain the bank policy rate at 40% and to support bureaux de change with foreign exchange requirements to support MSMEs that need foreign currency for their various productive requirements. 

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