UK's $800k trapped in collapsed AfrAsia unit

Published: 07 June 2015
The United Kingdom (UK) Department for International Development (DFID)'s $800 000 has been trapped in AfrAsia Zimbabwe Holdings Limited (AZHL)'s lending unit, Microking, following collapse of the financial institution.

MicroKing was shut down after AZHL surrendered its flagship banking subsidiary AfrAsia Bank Zimbabwe Limited (ABZL)'s licence to the Reserve Bank of Zimbabwe (RBZ).

However, Finance minister Patrick Chinamasa on Wednesday said government "will do everything in its power" to recover the funds.

DFID is a British government department responsible for administering overseas aid, with a goal to promote sustainable development and eliminate poverty.

In the financial year 2013/14, the department provided £106 million in aid to Zimbabwe.

"We will bend over backwards to save MicroKing…the DFID has an $800 000 equity in the organization and this is a gesture of good faith to investors, that government is able to intervene in processes like this," Chinamasa assured DFID secretary Mark Lowcock.

This comes as AZHL has advised that due to its bank's closure, plans to dispose Microking were derailed.

"AfrAsia Bank Limited's (ABL) made a strategic decision to exit Zimbabwe…As subsidiaries of the bank, MicroKing and AfrAsia Capital Management are also affected," the said ABL - a 62,5 percent shareholder in AZHL.

The group, last year said the due diligence was supposed to be conducted by mid-January, with investors expected to have submitted final offers in mid-January, after AZHL engaged local finance group Imara Capital Finance to jointly market a medium term secured note, which was expected to raise an additional $15 million in liquidity.

Upon ABZL's closure, the RBZ said the MicroKing had to be shut down in order to protect group assets.

The investment in MicroKing was part of the UK's drive to promote small-to medium enterprises in the country through the DFID.

"MicroKing has been successful in engagements it had with its clients to include low income people. They have been servicing the resources we have been putting into them. They have been successful in recovering and the payment ratio is good," Lowcock said.

"Our interest is to see a resolution of the current situation which enables that to continue. I know the ministry and the governor have the same interest. It is for the authorities to work it out. Our main interest is the interests of customers at MicroKing," he said.
- dailynews
Tags: AfrAsia,


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