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Women miners seek title collateral loan use

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FEMALE miners have pleaded with the government and banks to allow them to use mining titles as collateral for loans.

For years, many miners have been failing to access loans due to collateral requirements at financial institutions in Zimbabwe, which has prevented them from upscaling operations.

These miners, especially women and youths, are the most affected since financial institutions often lend to corporates.

In an interview with businessdigest, Women Empowerment in Zimbabwe national administrator Hellen Gareta said many female miners were financially constrained because of their inability to access loans.

“As we all know, mining is an industry that is financially demanding. We wish they (banks) could help in that area or they can endorse a system where we can use these very mines as collateral when seeking loans,” Gareta said.

According to the Zimbabwe Miners Federation, there are about 50 000 registered small-scale miners in the country, who employ at least 10 workers each on average.

Small-scale gold miners, in particular, contribute 60% of the total gold production, making them a large national  income generator.

Despite this, Gareta failed to access a loan when she needed it the most.

 “For instance, in my case, I visited the Woman’s Bank with my mine papers and told them this is all I have and they turned me down saying ‘mining papers are not part of the collateral they would consider’,” she said.

Bankers Association of Zimbabwe (BAZ) chief executive officer (CEO) Fanwell Mutogo said banks consider several factors when one applies for a loan.

“When seeking loans, there are several qualities and conditions that banks typically consider. These factors play a crucial role in determining loan eligibility and terms,” he said.

“Business viability – banks evaluate the business’ financial health, cash flow, and growth potential. A solid business plan enhances credibility.

“They also consider transferability, which refers to the ease with which ownership rights can be transferred from one party to another,” Mutogo added.

According to the BAZ CEO mining titles are not transferable; hence it is difficult to attach them as collateral when seeking a loan.

“It is very difficult to attach a value to a mining deed and therefore, it may be difficult to transfer ownership rights from one party to another,” Mutogo said.

In February, the country’s gold production fell by 22% to 1,85 tonnes compared to the 2,38 tonnes delivered in January mainly due to reduced output from small-scale producers. Thus, supporting small-scale miners to increase production or at least maintain their 60% contribution of total production would go a long way in improving the country’s gold output.

This comes as gold remains the most valuable and exported mineral in the country. – Zimbabwe Independent

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