According to a letter by the Central Bank to all the 16 local banks as well as Limited Liability Micro-finance institutions, the fund will be disbursed through local financial institutions.
Some funds to financial institutions for disbursement will be subject to interest rates while others will be zero-rated.
The application process for the funds, according to the letter signed by Central Bank Governor, John Rwangombwa, will see potential beneficiaries making applications to a financial institution of their choice.
The fund will support businesses under three key windows; hotel refinancing to enable the restructuring of loans held by hotels; working capital for businesses most affected by COVID-19 to keep them operational and avoid lay-offs; Micro-business loans for SMEs and Micro-businesses affected by COVID-19.
For working capital or line of credit, the central bank will lend to commercial banks at a 2 per cent interest rate while financial institutions will not exceed 8 per cent interest rates when lending to SMEs.
