Multi-lateral finance institutions charging high interest rates to Zimbabwean borrowers
Minister of Finance and Economic Development Patrick Chinamasa, has bemoaned the high interest rates that are being charged by multi-lateral finance institutions when lending Zimbabwean private companies. He noted that other countries get favourable rates, sometimes as little as 2-3% while Zimbabwe got as high 10-12% interest rate. According to Chinamasa, the institutions are biased against Zimbabwe.
The Minister was speaking about the $80 million facility that had been availed to the private sector in Zimbabwe by the Europe Investment Bank (EIB). He said
Zimbabwe’s problem is risk, if they are lending to Zambia, the interest rate will be two to three percent. But if they are lending to us the rates will be 10-12 percent, and that is a huge difference.
This is not only with respect to capital loans but even for working capital for our private sector