Companies shun RBZ’s US$300m finance facility
LIVINGSTONE MARUFU
The Reserve Bank of Zimbabwe (RBZ) is struggling to attract companies to its US$300m Targeted Finance Facility (TFF), largely due to what many firms describe as punitive interest rates.
The TFF was designed to provide affordable working capital to Zimbabwe’s productive sectors, yet the facility remains underutilised.
RBZ Deputy Governor, Dr Innocent Matshe, revealed that while firms continue to complain about tight liquidity, the funds are largely sitting idle at the apex bank.
“The central bank introduced the TFF but US$300m of that money is still sitting in the RBZ. Why is it sitting there and you (business) are crying about liquidity?” Dr Matshe asked.
He added that the market has sufficient liquidity, and economic agents should not complain about tight cash flows when they are not utilising available facilities.
Despite inflation falling to 4.1% in January 2026, the central bank has maintained interest rates at around 30%, rendering the cost of borrowing prohibitive for many companies.
Business leaders argue that the high rates are deterring potential borrowers.
The Zimbabwe National Chamber of Commerce (ZNCC) president, Tapiwa Karoro, said the manufacturing sector has long struggled with limited access to affordable credit, a challenge that has constrained retooling, productivity, and export competitiveness.
“While the introduction of the TFF by the RBZ is a welcome development, access to finance remains a pressing issue. The demand for credit in manufacturing runs into billions of dollars, far exceeding the size of the facility, and the high prevailing interest rates mean that many firms still find borrowing costly and unsustainable.
“Although the TFF has provided some relief, its scale is modest relative to the sector’s needs. Manufacturing firms require sustained, affordable, and long-term financing to modernise equipment, strengthen value chains, and penetrate regional and global export markets. The fact that manufacturing accounts for 45% of the uptake of the facility demonstrates both the sector’s appetite for funding and its strategic role in economic transformation. However, this should not be mistaken as an indication that the problem is solved, it simply reflects that manufacturers are in dire need of credit and have sought whatever limited relief was available,” Karoro said.
He added that the facility has only benefited a few firms, with the majority unwilling to face punitive interest charges.
“In its current form, the facility adds value by easing some immediate liquidity constraints, but it cannot substitute for a comprehensive industrial financing framework. To unlock the sector’s full potential, Zimbabwe requires concessional funding windows, patient capital, and partnerships with development finance institutions that can provide affordable, long-term credit tailored to industrialisation needs,” Karoro stated.
He emphasised that lowering the cost of capital will require a multi-pronged approach:
“Strengthening macroeconomic stability to reduce risk premiums, mobilising development finance through blended facilities, establishing a dedicated industrialisation fund, and deepening capital markets to attract private investment into industry. Only through such structural reforms can manufacturing access the scale and cost of financing it needs to drive sustained growth, job creation, and export diversification.”
Under the TFF, the RBZ does not lend directly to non-financial companies. Instead, funds are channelled through participating financial institutions such as AFC Commercial Bank, CBZ Bank, FBC Bank, and POSB (People’s Own Savings Bank), which then lend to businesses at a capped interest rate of 30% as of 2025/2026.
The facility specifically targets businesses operating in agriculture, manufacturing, tourism, and mining. By June 2025, over ZWG 392m had been disbursed under the TFF to support these essential sectors.
Businesses interested in accessing TFF funds are urged to apply through participating banks.
