Lendwithcare works with two Microfinance Institutions (MFI) in Zimbabwe to support women entrepreneurs to start or grow a small business. In the face of particularly challenging economic and political circumstances, the Managing Director of Thrive (Henry Bartram) tells us how this is having an impact on the women entrepreneurs and Thrive’s operations.
Recent political events in Zimbabwe offer the prospect that the political stalemate of recent years is over. This potentially frees up the new government to remove some of the blockages to economic progress and it has stated that economic reform is its priority. The recent budget statement has focussed on attracting foreign investment, reducing the budget deficit and addressing waste and corruption within government and parastatals. There is also considerable goodwill and interest in supporting Zimbabwe internationally though it is somewhat tempered by scepticism.The country does face formidable financial difficulties however and the government, still in early stages, has not yet demonstrated that it will be able to carry through with its intentions. Many of the proposed measures have been promised before with little actual delivery. Hard choices will need to be taken and these will involve political risk.
Our borrowers have found life hard over the last few years and have had to demonstrate both flexibility and endurance to get by. The rapid disappearance of physical cash had a harmful effect on business confidence as has price inflation of many foodstuffs and a poor harvest last year. There has been a slight return to confidence following a better harvest this year and increasing use of electronic money. The great majority of our borrowers have coped but often at lower levels of profitability.Most of our borrowers provide basic goods and services such as food, clothes or other core needs to similarly cash-strapped customers. Those who had ventured into more high end or discretionary offerings have generally retreated to more basic items unless able to access tourist markets.For these reasons, whilst we remain hopeful that economic reform can be achieved, we are not counting upon any significant or rapid improvement in the position of our borrowers. We expect that most of them will continue to operate a number of business activities at the same time and to be cautious in their own expansion plans. We will continue to focus on providing funding for viable business opportunities and appropriate training and support.
We expect that Thive will continue to grow next year as we expand both our product range and branch network. We will continue to strengthen our ability to understand our impact and remain focussed on borrower benefit.
- Henry Batram, Managing Director of Thrive