eBusiness Weekly
Business Writer
Cross-border traders have bemoaned delays by banks in approving loans, a factor they say was affecting operations and the potential to expand their businesses.
Most of the traders are women and rely on cross-border trade as their sole source of income. They also constitute a significant portion of micro, small to medium enterprises (MSMEs), which account for about 60 percent of the economy, according to a 2020 joint study by FinMark with support from the United Nations.
The traders, who buy goods for resale in and outside the country said it was taking up to two months or more to have their loans approved.
“In this hyperinflation, you can’t wait for that long because, by the time the money comes, it would have lost its value,” trader Gwendoline Sithole told Business Weekly recently.
“It would be better if we can be considered for the loans in foreign currency,” she added.
Zimbabwe’s annual inflation soared to 257 percent in July from 191,6 percent a month earlier, but the monthly rate dropped to 25,6 percent from 30,7 percent. The Reserve Bank anticipates the monthly inflation to further decline by between 3 to 10 percent.
Last week, the Reserve Bank of Zimbabwe said foreign currency-denominated loans now constitute more than half of the total banking sector loans. Zimbabwe Cross Borders Traders Association secretary general Augustine Tawanda said the cross-border traders should also be considered for foreign currency-denominated loans.
An official with a local bank said while it was taking too long for loan approvals, traders with “good existing relationships” with their banks get approvals faster.
Sithole said besides delays in approving the loans, most suppliers of goods were rejecting payments in local currency while sourcing foreign currency on the black market was a challenge.
This comes against a number of similar accusations levelled against manufacturing companies in Zimbabwe who have been demanding payment for certain key products exclusively in foreign currency in light of the inflation resurgence and exchange rate volatility that has been rocking the local currency.
In instances the manufacturers accepted payment in local currency, they quoted very steep prices to discourage buyers from using the Zimbabwe dollar, which has since been largely stable over the last few weeks on account of a cocktail of measures instituted by the Government through Treasury and monetary authorities.
Price differentiation
Traders also raised concern over price differentiation by some manufacturers for certain products, alleging that some foreign entities were accessing the same goods at lesser prices.
This, they said was making it difficult for local traders to compete, especially in regional markets.
Tawanda said while the traders have managed to secure markets for various products in the Democratic Republic Congo and Zambia, the price differentiation was throwing them out of business. “We are concerned with the continued marginalisation of cross-border traders,” he said. “We are finding it difficult to get products like Mazowe, sugar and margarine.
“The traders have the markets but we are failing to get the products. For example, the export of sugar is the monopoly of Zimbabwe Sugar Sales (ZSS). We have formed a company at the advice of the Reserve Bank of Zimbabwe to handle our exports but they are still not interested in giving us the product. We have now engaged the Government and we will continue doing that,” Mr Tawanda added.
