Lifeline for borrowers with processed loans

Lifeline for borrowers with processed loans

Nevanji Munyaradzi Chiondegwa

The Reserve Bank of Zimbabwe has begun implementing Government`s measures to stabilise the macroeconomic environment, which were announced by President Mnangagwa over the weekend.

This includes the suspension of lending by financial institutions, as investigations into exchange rate manipulation continue.

The apex bank however said it is it is willing to listen to pleas by those whose loans were already processed, to see if there is urgency to allow for a moratorium on the recently announced lending suspension.

This was in a letter written by RBZ Director Banking Supervision Dr Phillip Madamombe following a meeting between bankers and the RBZ Governor Dr John Mangudya earlier today.

Dr Madamombe said paragraph 40 of the Presidential Announcement which announced a suspension on lending by financial institutions is to be implemented without exception.

“For the avoidance of doubt, this suspension relates to all lending, whether local currency or foreign currency, to Government and the private sector, including corporates, other legal entities and individuals,” he said.

He added that no new credit facilities should be issued as the suspension covers new loans, undrawn portions of agreed facilities, overdrafts and other forms of borrowing instruments, by whatever name they are called.

Turning to pipeline transactions where all the facility terms and conditions had been met before the Presidential pronouncement, institutions were urged approach the Reserve Bank for consideration, on a case-by-case basis.

“With respect to pipeline transactions, where all the facility terms and conditions have been met before the above pronouncement, institutions may approach the Reserve Bank for consideration, on a case by case basis,” said Dr Madamombe.

This means there is hope for Government programmes like Command Agriculture, which are run through a credit facility.

The suspension of lending does not however apply to offshore drawdowns.

Dr Madamombe added; “The Reserve Bank will monitor compliance with the above directive and will take appropriate supervisory action against any non-compliant institutions.”