DIMAF to bail out firms under judicial management

HARARE - Government's revised Distressed Industries and Marginalised Areas Fund (Dimaf) will also bail out companies under judicial management, the Fund advisor Eric Bloch said.

This follows consultations between government and banks involved as the companies, which were described as “dead” by Finance minister Tendai Biti, were not considered as beneficiaries of the bailout package. CABS is one of the institutions involved in disbursing the $40 million Fund.

“Having discussed these things with Cabs managing director and with ministers Welshman Ncube and Biti, I believe we are going to see a different Dimaf in the coming six weeks,” Bloch, who is also a leading independent economist.

“The funding is not restricted to one year, but will be spread over a period of three years,” Bloch said.

Recently, the Zimbabwe Congress of Trade Unions in Bulawayo revealed that close to 10 companies in the city were placed under judicial management in the past eight months, as the industrial meltdown continued in the country’s second- largest city.

Bloch said alternative securities will be considered so as to accommodate firms without mortgage bonds to secure loans, hence more distressed companies are set to benefit.

Dimaf, is a facility created to help struggling firms retool and purchase raw materials to boost production as well as provide working capital to cover operating costs.

The Fund was launched in October last year.

But, lately there have been concerns over CABS delays in disbursing the funds, especially considering the increased number of firms that need urgent financial support.

Last month, Belmor Manufacturers closed shop laying off 300 workers, amid reports that it had also applied for Dimaf bailout.

In his presentation of the 2013 National Budget, Biti said government would embark on second phases of Dimaf and Zimbabwe Economic Trade Revival Facility (Zetref) with more funds expected to be disbursed.

Biti allocated $70 million for Zetref.

However, Bloch said the figures for both Funds were too little compared to at least $1 billion Bulawayo alone requires to resuscitate its industries.

“My concern is that it’s not going to be as much as needed. Yes it’s going up from $40 million to $100 million, but Bulawayo needs more than $1billion. Nevertheless with over $100 million, at least 80 companies will be assisted. So I think transformation is nigh,” Bloch said.

Last year, at least 85 firms in Bulawayo closed shop due to viability problems.

Capacity utilisation in the manufacturing sector has dropped by 13 percent to 44 percent owing to liquidity constraints as most firms failed to access long-term lines of credit. - Nyasha Chingono

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.