$5M Capital Compliance: Reserve Bank Says 2 Microfinance Institutions Complied
Only two out of seven operational deposit-taking microfinance institutions (DTMFIs) in Zimbabwe have complied with the central bank’s regulatory capital requirement of US$5 million, according to a report by the Reserve Bank of Zimbabwe.
The deadline for compliance was December 31, 2022, but the report reveals that only two DTMFIs had met the requirement. The RBZ has extended the deadline to December 31, 2023.
The report noted that non-compliant institutions were at various stages of implementing measures to raise their capital levels. The RBZ said in a micro-finance industry report for the quarter ended December 31, 2022:
Core capital for deposit taking micro-finance institutions increased by 16,71% from US$9,93 billion as at 30 September 2022 to US$11,59 billion.
Two out of the seven operational deposit-taking micro-finance institutions complied with the new minimum capital requirement of ZW$ equivalent to US$5 million effective 31 December 2022.
Compliance with the minimum capital requirements by non-compliant deposit-taking micro-finance institutions was extended by a further 12 months to December 31 2023, to allow for completion of the recapitalisation processes currently underway.
The bank continues to monitor progress towards compliance with both minimum capital requirements and economic capital to facilitate underwriting of more meaningful business.
In the quarter under review, total deposits for DTMFIs increased by 83.27% to $6.23 billion, with foreign currency deposits accounting for 74.47% of total subsector deposits.
The DTMFI subsector’s aggregate core capital registered a 27.77% increase to $12.70 billion, with much of the growth attributed to revaluation gains on investment property and foreign currency, organic growth, and additional capital injections by some DTMFIs.
The subsector recorded an aggregate net profit of $6.53 billion for 2022, with revaluation gains on investment properties and financial assets denominated in foreign currency being the main drivers of the profits.
More Pindula News
