ImpactAlpha, February 8 – Strive Masiyiwa and his wife Tsitsi are launching the Masiyiwa Rural Challenge Fund to enable access to financing for small businesses in rural Zimbabwe. Masiyiwa, who is ranked eighth on Forbes’ list of African billionaires, is personally financing the initiative, Zimbabwe’s The Herald reports.
An estimated 80% of Zimbabweans work in the informal economy and 70% don’t have bank accounts, spurred by the widespread mistrust in financial institutions that followed Zimbabwe’s currency crisis and economic collapse in 2008.
The Masiyiwa Rural Challenge Fund will originate loans of $1,000 to $10,000 to businesses based in or serving rural areas in Zimbabwe. Fifty percent of the fund will be earmarked for women borrowers. The Herald reports that interest rates on loans will not surpass 5% and repayments will be used to issue new loans.
Steward Bank, a Zimbabwean commercial bank that Masiyiwa and his family control, will oversee loan disbursement. Masiyiwa made his wealth in the telecom business, founding Econet Wireless, primarily used in Southern Africa. He and his wife are also the founders of Higherlife Foundation, which runs a scholarship fund for vulnerable and disadvantaged youth.
About the fund, Masiyiwa said: “We have also challenged our friends in the philanthropy community to join us to expand it across Africa.”
In 2017, U.K. development finance institution CDC Group partnered with Standard Chartered Bank Zimbabwe on a $100 million loan fund for Zimbabwean small businesses. The fund is both trying to improve business owners’ access to finance and coax private investors back to Zimbabwe in the post-Mugabe era.