FINANCE, Economic Development and Investment Promotion Minister Professor Mthuli Ncube has announced the award of Prescribed Asset Status for Empower Bank.
This move will help to mobilize funds and ease loan payments to young entrepreneurs.
Prescribed assets represent a percentage of pension funds’ (and possibly institutional investors’) assets that are legally required to go to certain instruments approved by the Government.
President Mnangagwa established his Youth Empower Bank as part of the Government’s effort to empower young people by providing a bank that is specifically designed to meet their requirements.
When he was in parliament last week, Professor Ncube told parliament that this move will play an important role in extending the amount of resources accessible for Empower Bank, which are also available to investors from other sectors.
The professor also said that the Ministry of Youth Empowerment, Development and Vocational Training was allotted ZWG1 billion by 2025, including ZWG200 million specifically allocated for vocational training activities.
The allocation is also designed to aid in the processing of loans by Empower Bank.
“Regarding Empower Bank, I can confirm that I awarded Empower Bank the status of a prescribed asset. This means that, going forward, they will find it easier to collaborate with other pension funds, investors and other entities that will be eligible for benefits from the prescribed asset provision through collaboration in partnership with Empower Bank,” he explained.
He added that this status will allow Empower Bank to access more resources that can be shared with other investors and could aid in its recapitalisation.
Empower Bank provides loans for youth-led agricultural and business projects as well as guarantees, asset finance and savings accounts servicing urban, peri-urban as well as rural areas in Zimbabwe.
Empower Bank also aims to help marginalized communities and encourage the development of small-scale enterprises to create opportunities for employment.
In addition, Professor Ncube has declared that Zimbabwe Women’s Microfinance Bank has also been given the Prescribed Asset status.
This comes from the fact that women comprise fifty percent of all Zimbabweans. are believed to contribute significantly to the economy, even though they are receiving just 10% of the country’s income.
In 2023, programs funded by the Government have paid out nearly US$187 million and ZWG8,5 billion over the first quarter in the calendar year.
Legally, pension funds and insurance companies are required to allot at minimum 20 percent of their portfolios to the prescribed assets.
The Insurance and Pensions Commission (IPEC) which is the regulatory body has previously issued statutory asset status to certain companies like African Century (US$15 million for forward lending), Pure Oil (US$5 million for soya bean imports and imports of crude oil) and Centra West (US$42, 5 million for power generation).
Additionally, it was reported that the Zimbabwe Electricity Industry Pension Fund has been granted prescribed asset status for $6.5 million to fund the construction of the Marondera Shopping Mall, and Datvest was awarded US$7,5 million to fund the construction of a residential stand.
