Credit Union for Sawmillers
February 24, 2016, MISCHEK WANGW. THE Zambia National Association of Sawmillers says economic potential of the wood processing sector has continued to be undermined by the lack of access to finance from banks. In a statement, association president William Bwalya stated that access to finance was the single greatest concern of small-scale enterprises, including sawmillers, in Zambia.
"Similarly, due to structural and other constraints, the wood processing industry is not well understood, access to medium and long term finance is almost impossible. Banks and other lending institutions in Zambia tend to be very conservative and are even less likely to invest in a sector they regard as unfamiliar," Bwalya stated. He stated that rep ayment of loans had also become difficult to service owing to high bank interest rates, ranging from 19 to 30 per cent, coupled with low margins associated with the exploitation of forest and wood products.
Bwalya stated that in order to raise the required capital, some association members opted to be borrowing from Congolese traders with numerous cases being recorded where some sawmillers were taken to police by their lenders.
"We started seeking ways and means of strengthening our members' businesses. We approached the Embassy of Finland to seek for ways to improve our sector since they are a high-tech country through forestry. The Finnish connected us to the Zambia Green Jobs Programme being facilitated by five United Nations agencies (Food and Agricultural Organisation, United Nations Commission on Trade and Development, International Labour Organisation, United Nations Environmental Programme and the International Trade Center). We have been working closely with these agencies and from some of the workshops, we were encouraged to set up a credit union scheme for members to borrow money from at low interest rates".
Bwalya stated that the International Trade Center had agreed to help the association in establishing a credit union for sawmillers by funding half the cost of consultancy and training of board members for the union.
He stated that the sawmillers association credit union would be for its members who would buy shares at K3,000 each.
"The money from the sale of shares shall be used to lend members at reduced rates. The credit union has been registered with the Registrar of Societies. Only one formality is remaining, that is to have the court endorsing it and that will be done soon. We are grateful to the United Nations Trade Center for coming to our assistance and we are confident that the programmes the government is undertaking with the government of Finland with facilitation of the five UN agencies would yield positive results. This is a landmark achievement for ZNAS," stated Bwalya.
Article originally published by the Post Zambia