By Plaxedes Sibanda, HARARE, March 5 (The Source) – Government says it will rescue MicroKing, the micro-lending arm of AfrAsia Bank Zimbabwe — which was closed last week when its Mauritian owners pulled out — after visiting United Kingdom secretary for international development, Mark Lowcock raised fears over British investment in the institution.
Finance minister Patrick Chinamasa told journalists on Wednesday evening that the British have $800,000 worth of investments in MicroKing, which is facing an uncertain future after it was put up for sale by Mauritius incorporated AfrAsia Bank Limited, along with asset manager AfrAsia Capital Management (ACM), before AfrAsia’s exit from the former Kingdom Financial Holdings.
The investment was part of UK’s drive to promote small-to medium enterprises in the country through the Department for International Development (DFID).
“The MicroKing has been successful in engagements it had with its clients to include low income people. They have been servicing the resources we have been putting into them. They have been successful in recovering and the payment ratio is good,” said Lowcock.
“Our interest is to see a resolution of the current situation which enables that to continue. I know the ministry and the governor have the same interest. It is for the authorities to work it out. Our main interest is the interests of customers at MicroKing.”
Central bank governor John Mangudya said the micro lender was in talks with potential investors.
“We will bend over backwards to save MicroKing,” Chinamasa replied.
“What Mr Lowcock is actually saying is that poor people pay better than rich people. They don’t do insider trading, they don’t borrow to go and build mansions like what we have witnessed elsewhere in this country. They are ethical enough, they honour their obligations.”
Chinamasa also urged the UK government to have direct engagement with Zimbabwe after relations with its former colonial master broke down in 2000 over allegations of human rights violations and electoral theft against President Robert Mugabe and his ZANU-PF party.
Mugabe denies the charges and contends that the UK’s stance is motivated by his seizure of white owned farms which he redistributed to landless black at the turn of the millennium.
In recent times, however, ties between the two countries have thawed along with those between the southern African country and the European Union, which has resumed direct aid to Harare after lifting restrictive measures on senior government officials and state-owned companies.
Only Mugabe and his wife Grace remain under travel restrictions.
“Currently, UK is a quiet a contributor to our development assistance but it is doing so indirectly through funds which are run and managed by African Development Bank and also by the World Bank. In our discussions, I have appealed to him that we have a direct engagement in the same manner that the European Union has been able to do,” said Chinamasa.
“The British business people continue to sit on the fence and my observation is that it is because of that political standoff between the UK government and Zimbabwe. We need to normalise and clear hurdles so that we normalise our relations.”
Chinamasa also pleaded with Britain to intervene in the Zimbabwe’s debt with multilateral institutions — Harare owes International Monetary Fund and World Bank $124 million and $1 billion.
“In particular, we actually asked him to go and think about whether (UK) can act as champion to spearhead the resolution of the clearance of arrears especially with multilateral institutions,” he said.