Staff Reporter
BULAWAYO — A scramble for the Distressed Industries and Margin-alised Areas Fund (DIMAF) has broken out as it is increasingly becoming clear that the US$40 million allocated to the fund is not enough to resuscitate the many ailing industries in the second largest city in Zimbabwe.
Since 2010, nearly 90 companies have closed shop in the city.
According to reports, 58 out of the 90 closed companies have been earmarked to benefit from the fund.
The Matabeleland Businesses Association estimates that in excess of US$1 billion is required to revive the city’s industries, which means about US$960 million more would be needed to close the funding gap. The general feeling from businesses in the city is that while the US$40 million itself is not enough, the fund should benefit both small and big companies. So far, only the big companies have been prioritised in the allocation of the fund.
Association of Businesses of Zimbabwe chairperson, Lucky Mlilo, said the scramble for the meagre resource was inevitable.
He said: “In any case the fund is not enough; it is enough for only one company. So really whatever criterion was used there was bound to be a scramble as the amount is too little to sustain the city’s industries.”
According to Mlilo, when a committee was established to head the taskforce on DIMAF last year, both small and large industries were supposed to benefit from the fund. He said it was also agreed that the loans would range from US$5 000 to a maximum of US$1 million.
“We thought then that that meant that the fund would benefit small and large companies,” he said.
Industry and Commerce Minister, Welshman Ncube, however, said last week priority would be given to the bigger industries.
Observers appear to back Ncube saying it is only reasonable to give priority to the bigger companies as these had the capacity to employ more people.
Concerns have however, been raised over the application process and conditions set by government for local firms to qualify for DIMAF funding.
The Central African Building Society, which is the disbursing authority, requires a minimum of two years audited accounts, acceptable collateral and projections for capital expenditure from the applicants. Captains of industry in Bulawayo feel this is too tough for the distressed companies.
So far, only 28 companies have applied for funding but the names of the beneficiaries are still to be made public, sparking ire among the business community. — Staff Reporter.
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