One of Zimbabwe’s commercial banks, Metbank, plans to set up a pre-business set-up facility to fund small-scale miners’ operations at the business’ early stage of development.
Of late, in some instance small-scale miners have failed to register mining claims before the first run of their operations and tapping into the minerals deep-seated underground due to financial constraints.
In an interview at the end of the recently held small-scale miners’ conference in Bulawayo organised by the Zimbabwe Miners’ Federation (ZMF), Metbank executive director Mr Ephraim Chawoneka said:
“Its (pre-business set-up facility) mainly looking at issues to do with licensing and all the requirements for example, from entities like EMA (Environmental Management Agency) and local authorities.
“You know there are certain fees that are supposed to be paid by miners before they are even able to do the first run of the business.
“What we are basically saying is that instead of coming when these guys have actually toiled to get to that stage where they are making payments, we need to be actually be with them as they start their journey.”
However, he would not be drawn into ascertaining the total figure his bank will avail under the pre-business set-up finance package because EMA was in the process of revising the fees that it charges small-scale miners for their activities.
At the conference, ZMF president Ms Henrietta Rushwaya requested Government to review downwards its levies and fees by margins ranging between 75 percent and 97 percent.
Mr Chawoneka said in coming up with a congregated figure for the pre-business set-up facility, they will consider all the issues around fees and levies small-scale miners have to pay before crafting loan limits.
Asked about the payback period for the pre-business set up facility, he said:
“We’ll match funding to a business cycle, so a gold miner is different from a chrome miner and is also different from a precious minerals miner.
“You will find that everything must speak to the business cycle of the mineral concerned, if it’s so demands that we should give 18 months or 24 months facilities, we’ll do that because that is what the business demands.
“It’s not about what Metbank is capable of giving or what the market is dictating. We have to listen to the business cycle and I urge other financial institutions to obviously follow suit; pitching their funding against business cycles.”
Mr Chawoneka said depending on the amounts of less than $10 000, the pre-business set up facility would not require collateral.
Lately, concerns have been raised that enterprises across different economic sectors have failed to borrow from financial institutions due to stringent collateral requirements.
And on interest rates under the pre-business set-up facility, he said Metbank lending rates would be subject to the source of funding and the economic fundamentals.
“Our interest rates range between six percent per and 15 percent per annum and our rates for pre-business set-up facility will be dependent on the risk profile of the business that we are talking about,” he said. — @okazunga