By Shamiso Mangwengwende, Associate

On the 4th of June 2020 the Ministry of Finance issued guidelines and modalities for access to the 18-billion-dollar stimulus package that is aimed at assisting the recovery of businesses that have been affected by the economic slowdown caused by the Covid-19 pandemic. The package has been allocated to different sectors and the funds can be accessed in the form of a loan either through the banks or through line ministries. The loans which are to be accessed through the banks will be disbursed through the normal loan application processes administered by the banks and they will be guaranteed by the Government of Zimbabwe.

Productive Sector – ZWL$10.6 Billion

This includes the Agricultural, Mining and Tourism sectors which will be able to access loans through the banks. Businesses applying for loans through this facility have to satisfy the following requirements:

1. Have ZIMRA tax clearance;
2. Be compliant with NSSA;
3. Pass a credit check to be done by the bank;
4. Run an existing project at the time of application;
5. If the applicant is applying for a loan for a new project, it will be considered if it is in the health sector to aid in the fight against Covid-19; and
6. Be registered with the Zimbabwe Tourism Authority and eligible to access the Tourism Sector Fund – this applies to the tourism sector only

An applicant will be disqualified from accessing the funds if they have previously defaulted on a loan, or if the loan is to be used to fund real estate, equity, speculative and illegal activities. The interest rate on the loans has been capped at 20%. Businesses in this category will be given a grace period of up to three months before they have to start repaying the loans.

SME Support Fund – ZWL$500 million

Loans under this category are to be accessed through Empower Bank, Zimbabwe Women’s Microfinance Bank, Small and Medium Enterprises Development Corporation (SMEDC) and the Post Office Savings Bank (POSB). A grace period of up to 90 days will apply before the applicants have to start repaying the loans. Normal bank loan application procedures will apply.

Artists and Athletes – ZWL$20 Million

A 20 million-dollar facility has been granted to this sector to support the creative and cultural industries as well as the sports fraternity. The funds will be administered through the Ministry of Youth, Sports, Arts and Recreation and guidelines for applications for this facility will be issued in due course.

Import duty

A rebate has been put in place for the import of selected raw materials from the 1^st of April to the 31^st of December 2020. This is aimed at reducing cost of production for businesses in the manufacturing industry.

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