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Tuesday, 14th May, 2013.

The House of Assembly met at a Quarter-past Two O’clock p.m.


(MR. SPEAKER in the Chair)



  1. SPEAKER: I wish to urge all Party Whips to encourage their members to attend tomorrow’s sitting in order to meet the two thirds majority which is 144 members, requirement for the Constitution of Zimbabwe Amendment (No. 20) Bill [H.B. 2A, 2013] in terms of Section 52 of the Constitution.  The Bill has been amended by the

Senate and this entails that the House considers the said amendment.


                                                          BUSINESS OF THE HOUSE

THE MINISTER OF FINANCE: Mr. Speaker Sir, I move that Orders of the Day Nos. 1 and 2 be stood over until the rest of the Orders of the Day have been disposed of.

Motion put and agreed to.





the motion standing in my name:

THE WEREAS Subsection (1) of section 111B of the Constitution of Zimbabwe Provides that any Convention, Treaty, or Agreement acceded to, concluded o executed by or under the authority of the President with one or more foreign States or governments or international organisations shall be subject to approval by Parliament; AND WHEREAS the Government of Zimbabwe now desires to ratify the United Nations convention on the Rights of Persons with

Disabilities which was adopted on 13th December 2006;

AND WHEREAS in accordance with its article 42, the Convention and it Optional Protocol opened for signature by all states and regional integration organizations at UN Headquarters on 30th March 2007;

NOW THEREFORE, in terms of Subsection (1) of section 111B of the Constitution, this House resolves that the aforesaid Convention be and is hereby approved for accession.

My Ministry which administers the Disabled Persons Act seeks your approval for signature and ratification of the UN Convention on the Rights of Persons with Disabilities and its Optional Protocol.  As you are aware, Zimbabwe was one of the first countries to have a Disabled Persons Act but up to now we have not yet aligned to this important international instrument that addresses the needs of the disabled persons.

Why A Convention for the Disabled?

Firstly, the Convention was crafted to respond to an overlooked development challenge.  Research shows that approximately 10% of the world’s populations are persons with disabilities (over 650 million persons). Approximately 80% live in developing countries.

Secondly, it was in response to the fact that, although pre-existing human rights conventions offer considerable potential to promote and protect the rights of persons with disabilities, this potential was not being tapped.  Persons with disabilities continued being denied their human rights and were kept on the margins of society in all parts of the world.  The Convention sets out the legal obligations on States to promote and protect the rights of persons with disabilities.  It does not create new rights.

A person using a wheelchair might have difficulties gaining employment not because of the wheelchair, but because there are environmental barriers such as inaccessible buses or staircases which impede access.  Persons with extreme near-sightedness who do not have access to corrective lenses may not be able to perform daily tasks.  This same person with prescription eyeglasses would be able to perform all tasks without problems.

Convention Terminology

The Convention teaches us to use respectable terms like ‘persons with disabilities’.  It discourages the term ‘handicapped’, ‘physically or mentally challenged’.  Please note however that preferences for terminology among persons with disabilities and among geographic regions may vary.  The individual wishes of persons with disabilities should be respected as much as possible.

Convention Structure


  1. Purpose
  2. Definitions
  3. General principles
  4. General obligations
  5. Equality and non-discrimination
  6. Women with disabilities 7. Children with disabilities
  7. Awareness –raising.
  8. Accessibility
  9. Right to life
  10. Situations of risk and humanitarian emergencies
  11. Equal recognition before the law
  12. Access to justice
  13. Liberty and security of the person
  14. Freedom from torture or cruel, inhuman or degrading treatment or punishment
  15. Freedom from exploitation, violence and abuse
  16. Protecting the integrity of the person
  17. Liberty of movement and nationality
  18. Living independently and being included in the community
  19. Personal mobility
  20. Freedom of expression and opinion and access to information
  21. respect for privacy
  22. Respect for home and the family
  23. Education
  24. Health
  25. Habilitation and rehabilitation
  26. Work and employment
  27. Adequate standard of living and social protection
  28. Participation in political and public life
  29. Participation in cultural life, recreation, leisure and sport
  30. Statistics and data collection
  31. International cooperation
  32. National implementation and monitoring

34 to 40 International monitoring mechanisms

41 to 50 Final clauses optional protocol

Convention Bodies

The Convention has two bodies namely:

  • Conference of States Parties

Which meets in order to consider any matter with regard to the implementation of the Convention (biennially or upon decision by the Conference).

  • Committee on the Rights of Persons with Disabilities

This is a body of independent experts serving in their personal capacity tasked with reviewing States’ implementation of the

Convention. It initially comprises 12 independent experts; rising to 18 members after an additional 60 ratifications or accessions to the Convention.

Optional Protocol

The Optional Protocol (which seeks to be ratified together with the

Convention) creates additional functions for the Committee on the Rights of Persons with Disabilities.

Individual communications: Committee considers communications from individuals or group of individuals claiming to be victims of a violation of the provisions of the Convention by a State Party of the party to the Protocol.

Inquiries: Committee member may conduct an inquiry on a State Party, following information received indicating grave or systemic violations of the Convention by State party.


Hon. members, let me conclude by saying that the challenge of ratifying and implementing the Convention is now. There is urgent need for training, capacity building, awareness raising, good practices collection and validation, knowledge management.

There is need to mainstream disability in all development activities. There is need for implementation of Convention principles in the internal operations of Government.

And finally there is need to include persons with disabilities in all stages of implementation and build capacity of organisations of persons with disabilities to do so as the persons with disabilities echo the adage


I therefore, seek for approval from this august House, to sign and ratify the United Nations Convention on the Rights of Persons with Disabilities together with its embedded Optional Protocol.

Motion put and agreed to.






(MS MPARIWA):  I move the motion standing in my name:

THAT WHEREAS Subsection (10 of Section 111B of the

Constitution of Zimbabwe provides that any Convention, Treaty, or Agreement acceded to, concluded or executed by or under the authority of the President with one or more foreign States or government or international organisations shall be subject to approval by Parliament;

AND WHEREAS the Government of Zimbabwe now desires to ratify the African Union Convention for the Protection and Assistance of

Internally Displaced Persons in Africa (Kampala Convention);

AND CONSCIOUS of the gravity of the situation of Internally Displaced Persons as a source of continuing instability and tension for the African States;

AND ALSO CONSCIOUS of the suffering and specific

vulnerability of internally displaced;

AND WHEREAS the entry into force of the aforesaid Convention shall be subject to Article 17 of the Convention;

NOW THEREFORE, in terms of Subsection (1) of section 111B of the Constitution, this House resolves that the aforesaid Convention be and is hereby approved for ratification.

Thank you for giving me again this opportunity. The Head of

State, His Excellency, the President of the Republic of Zimbabwe, Cde R. G. Mugabe signed the Kampala Convention in 2009. This noble gesture demonstrated the Government of Zimbabwe’s commitment  and will to protect and assist persons who become victims of internal displacement due to various factors.

Forty percent of all the people worldwide have been displaced within their own country as a result of conflict or violence in Africa. Africa has 9.7 million internally displaced persons according to the

United Nations High Commission for Refugees. There are almost four times as many internally displaced people as there are refugees in Africa. Unlike refugees (IPDs) do not have special status under international law.

The African Union Convention for the protection and assistance of

Internally Displaced Persons (IDP) also known as the Kampala

Convention came into force on 6 December, 2012. It is the world’s first legally binding instrument to cater specifically for people displaced within their own countries or boundaries adopted at the AU Summit in Uganda, Kampala.

The Convention required ratification by 15 member states before it could enter into force. Swaziland became the 15th country to do so on the 12th of November 2012, joining Berlin, Bokina Faso, Central Africa

Republic, Chad, Gabon, the Gambia, Guinea Bissau, Lesotho, Niger, Nigeria, Sierra Leon, Togo, Uganda and Zambia. At least 37 other AU states including Zimbabwe have signed the Convention but have not yet

ratified it.

        Purpose of the Kampala Convention

The Convention aims to establish a legal framework for preventing internal displacement and protecting and assisting internally displaced persons in Africa.

         The Kampala Convention in Brief

It reaffirms that national authorities have the primary responsibility to provide assistance to internally displaced people. It comprehensively addresses different causes of internal displacements; conflicts generalised violence, human cause or natural disasters and development projects like building dams or clearing only land for large scale agriculture. It recognises the critical role that civil society organisations and the communities which take them in play in assisting IDPs and obliges governments to access the needs and vulnerabilities of the accessibly displaced and the host communities, in order to address the plight of people uprooted within their borders.

It was adopted by the African Union and currently legally binds 15 African countries to prevent displacement, assist those who have been forced to leave their homes, and find safe and sustainable solutions to help people to rebuild their lives and homes. A total of 37 African countries (including Zimbabwe have demonstrated their commitment to the Convention by signing it, but are not yet legally obliged by its contents.

Structure of the Convention

The Convention is structured as follows:


Article 1, Definitions

Article 2, Objectives

Article 3, General Obligations Relating to States Parties

Article 4, Obligations of States Parties relating to Protection from

Internal Displacement

Article 5, Obligations of States Parties relating to Protection and


Article 6, Obligations Relating to International Organisations and

Humanitarian Agencies

Article 7, Protection and Assistance to Internally displaced persons in

Situations of Armed Conflict

Article 8, Obligations relating to the African Union

Article 9, Obligations of States

Article 10, Displacement induced by Projects Parties Relating to

Protection and Assistance during Internal Displacement

Article 11, Obligations of States parties relating to Sustainable Return,

Local Integration or Relocation

Article 12, Compensation

Article 13, Registration and Personal Documentation

Article 14, Monitoring Compliance

Article 15 Application

Article 16, Signature, ratification and membership

Article 17, Entry into Force

Article 18, Amendment and Revision

Article 19, Denunciation

Article 20, Saving Clause

Article 21, Reservations

Article 22, Settlement of Disputes

Article 23, Depository

It is against the above background that approval of this honourable House is sought to ratify the signed Kampala Convention for the betterment of IDPs in Zimbabwe. I thank you Mr. Speaker.

  1. F. M. SIBANDA: Mr. Speaker, I need to thank you for allowing me to speak and also thank the Minister to have brought this overdue Convention. I think this is an opportune time that this Convention be implemented without any delay. I am also happy to say that the Constitution that we have just adopted five days ago also take cognisance of a child under 15 who would be found roaming around the streets would automatically become a Zimbabwean. That alone serves this contention, but I want also to be aware and to be told how we are going to deal with our internally displaced people, particularly whom we call izibonda, people who are psychiatric, people who are insane, people who have been devastated by wars, unemployment, poverty, orphanage and also violence caused by us or by politicians?

We may find that there is a lot of people in the outlyning cities where you find people are now living like slaves in their country. They are running away from politically motivated violence. They have no food from the rural areas. They go to towns with a belief that they would be employed and they end up having no employment and they get mentally ill because of these social problems.

Zimbabwe is also recorded in international books that it is known for human trafficking. When human trafficking is not controlled, you would find that people from other countries would come to Zimbabwe and then there is an influx of the population whereby we now have problems of sharing the economy of the country. There are war refugees that I need the Minister to take cognisance of, economic refugees that are also in Zimbabwe and abroad. We also have social refugees. On this issue what about documentation of people without anybody to vote for.

Children, even adults that are roaming, for example in Magwegwe, where people wanted to register for these coming elections; they could not be registered because they wanted somebody to vote for them. So it ends up increasing a lot of refugees and displaced people. So in a nutshell, we have to minimise conflicts and minimise devastation of habitats like Murambatsvina which has caused a lot of untold harm in this country. So I am thankful that the Minister has brought this Convention it might lessen the problems that we have been facing throughout the country.

  1. GWIYO:  I would also like to also take this opportunity to congratulate and welcome the motion by the Hon. Minister of Labour and Social Services.  I would like us to note the fact that it is not enough to ratify the Convention but we would like to urge the Executive to take appropriate measures that are consistent with the procedures that are required when you are following up a Convention that has been ratified.

Mr. Speaker, this Convention is quite appropriate in that it applies to our situation, from independence to date.  The most event prevalent that everyone will remember is Operation Murambatsvina.  So it is also my hope that those issues that have not been attended to by the demolition of people’s houses would be rectified.  I am also hoping that this Convention would also speak to local authorities that initially allow people to build dwellings and then all of a sudden, it decides to demolish the buildings.  Like I said, I obviously welcome this Convention but we need to speak to it through the issue of budget allocation.  Without funding, some of these Conventions will remain on paper.  I thank you.

*MRS. ZINYEMBA:  I would like to thank the Minister for bringing this motion to Parliament which deals with the migration of people.  I would also like to thank the President for signing these two Protocols.  This shows that our President, the leader of the country, is aware of the people that are suffering, that is why he committed himself and signed the two Protocols.  In our Constitution, the disabled and the elderly are catered for in the human rights.

I would like to comment on what has been said by the previous speakers, on the issue of Operation MurambatsvinaOperation Murambatsvina led to Operation Garikai.  Let me explain the difference between these two.  About 90% of houses demolished under Operation Murambatsvina, most of these people had stands and they were referred to as landlords.  They would build houses at the stand, and people would migrate into towns as bachelors, as spinsters and they would come and lodge there … - [HON. MEMBERS:  Inaudible interjections]

  1. SPEAKER: Order, hon. Member, order. Hon. Member, you are required to debate the principles of the Convention, you may continue but restrict yourself to the principles.

*MRS. ZINYEMBA:  Thank you Mr. Speaker.  We want to treat this fairly because we can get lost as people.  What I want to emphasise is that, people would get employed …- [HON. MEMBERS:  Inaudible


  1. SPEAKER: Hon. Zinyemba, I have already made a ruling, you are not doing any comparisons here. You are here to debate the principles of the Convention that have been raised by the Minister of Labour and Social Services.

*MRS. ZINYEMBA:  I cannot go on arguing with you but I wanted to debate.  The previous speaker has referred to Operation

Murambatsvina and I wanted to respond to that.  Before Operation

Murambatsvina, people would die as lodgers but when Operation

Garikai came, people now own their own houses.  If we the people of

Zimbabwe – [AN HON. MEMBER:  Akadhakwa.]

  1. SPEAKER:  Order, there is an hon. Member at the back there who said, “she is drunk”, can you stand up.  Hon. Member who said, “she is drunk”, can you stand up.  At the back there, I am looking at you, hon. Member, can you stand up.  Hon. Member, I am looking at you.  Hon. Member at the back, if you are honourable, stand up – (AN

HON. MEMBER:  Unodzingwa shamwari, chisimuka, unozikanwa) –

Hon. Member who said, she is drunk, stand up.

  1. MARAMWIDZE:  I withdraw.

*MRS. ZINYEMBA:  Let me continue.  I have always debated in this House that as MPs in this House, leaders of the country, we should not dilute the important things that are brought into this House.  When we see Conventions like this one, instead of saying this and that, it is water under the bridge Mr. Speaker.  Let us go forward in rebuilding our country, doing good for our people, so that after we have served our generation, they will congratulate us that we have done something to our nation.  Thank you.


(MS. MPARIWA):  Thank you Mr. Speaker, I want to thank the hon. members who have actually contributed to this particular motion on the ratification of the Convention on the Assistance of the Internally Displaced Persons.

Indeed what they have raised is actually what we seek to do once this Convention has been adopted.  Talking of unemployed and the indigent persons, this is exactly what this Convention intents to cater for once it has been ratified by Parliament.  So, in short let me take this opportunity and also to express my gratitude to the Chairperson of the

Portfolio Committee on Public Service, Labour and Social Services, Hon. Zinyemba.  Thank you very much for the support and all the hon. members who have supported this particular motion.

Motion put and agreed to.



Fifth Order read:  Adjourned debate on the Second Reading of the Micro-Finance Bill.

Question again proposed.

  1. CROSS:  I want to first of all express our appreciation from the Budget and Finance Committee to the Minister for permitting us this extra time for consultations.  The Committee has concluded its consultations on this particular Bill.  We wish to now make our proposals known to the House and we will provide a copy of this to the Minister after this debate.

As part of its oversight function, the Portfolio Committee on Budget, Finance and Investment Promotions has undertaken a full analysis of the Micro-Finance Bill.  The Committee commends the Minister for coming up with this piece of legislation which will bring some sanity to the financial sector.  It has its challenges at this moment, particularly in so far as the borrowing public are concerned.  The Committee wishes to raise concern over some provisions of the Bill which needs nullification in order to enhance the content of the Bill before it is adopted by this House.

The Committee greatly appreciates the written and oral evidence from the Reserve Bank of Zimbabwe, the Zimbabwe Association of Micro-Finance Institutions and the Law Society of Zimbabwe for the evidence they gave to us.  The Committee would have liked to have conducted public hearings on this particular Bill as it affects the general populace but this was not possible because of time and financial constraints.

After considerations of these provisions and submissions from stakeholders, the Committee has the following concerns and recommendations for the Minister to consider.  In so far as the memorandum to the Act, the Micro-Finance Bill seeks to amend the Money Lending Rules and Interest Rates Act.  The Committee proposes that the Money Lending and Rates of Interests Act be repealed.  The Committee is rational, it is not ideal to have a multiplicity of various legislations governing operations of micro-finance institutions.  Your Committee proposes that those clauses of the Money Lending and Rates of Interests Act should be retained, be incorporated into the new Bill.

Definitions, Mr. Speaker Sir, the Committee humbly selects the definitions for money lending to micro finance institutions

THE DEPUTY SPEAKER:  Order, order.  On this Sir, it is no longer the sir, the Sir has gone out.

THE MINISTER OF FINANCE: May I request the hon. member

to come to the front of this table.

  1. CROSS: Thank you Madam Speaker, in so far as the definitions are concerned, your Committee humbly submits that the definitions of terms - money lender, micro finance institutions, micro financier, micro finance business are not very clear and they confuse.

To avoid this confusion, the Committee recommends that there should be only two categories of Money lending Institutions (MFIs”, “or credit only MFIs” and “deposit taking MFIs”. This would then exclude from the application of the Act, those money lenders functioning at the informal and smallest sections of the microfinance industry.  This particular recommendation was supported very strongly by the Reserve Bank as the regulator.   

Similarly, it would be desirable to have a simple distinction by having “credit only microfinance business” and “deposit taking microfinance business”. The definition of the term “microfinance institution” in the Bill, excludes deposit taking and this is a departure from the generally understood meaning of the term. The definitions suggested to the Reserve Bank by Ernst and Young, were regarded by the industry and the regulator as being more appropriate in the circumstances.

Definition of Chief Executive Officer (CEO)

The Committee notes that the definition of CEO in the Bill refers to the “banking business”. The Committee proposes that this be restated to refer to “microfinance business”.

        Definition of financial institution

The Committee also notes that there is need to revisit the definition of the term “financial institution”. The Bill defines the term “financial institution” by making reference to the Banking Act but the Banking Act does not define “financial institution” as such. Instead, the Act defines

“financial entities”.

        Application of the Act

Madam Speaker, the draft Bill provides that the Act shall apply to subsidiaries and divisions of banking institutions already registered under their respective Acts. The Committee feels that the microfinance business of a division or department of a registered bank should not be subjected to the Micro Finance Act as the bank is governed in terms of the Banking Act. The Committee recommends that where the microfinance activities of a commercial bank is carried out by a separate, but wholly owned company, that the subsidiary should be required to apply for an MFI license.

       Prohibition in relation to conduct microfinance business

Madam Speaker, the Bill provides that only a company may be registered as a microfinance institution. The Committee notes that the definition of “microfinance institution” does not necessarily include a money lender. Therefore, the requirement to be a company does not apply to an applicant who wants to be a registered money lender only, who may register as an individual or as a partnership. The Committee recommends that the requirement to be a company should apply across the board to include money lenders as well, since enforcement of legislation or policy is easier on companies as opposed to individuals. All micro financiers would therefore be required to operate through a corporate structure registered under the Companies Act.

         Renewal of Registration

Clause 10 of the Bill states that the registration certificate shall be valid for a period of a year. The Committee accepts the submissions made by the microfinance institutions and the regulator on the burden imposed by the need to renew licences on an annual basis. It was also noted that such a restriction would preclude micro financiers entering into agreements or contracts that run for periods longer than a year. The Committee recommends that the licences should be perpetual, with a requirement for annual fees paid at least two months before the expiry of a date when the institution was previously registered.  This brings this particular regulation into line with Security Act proposals.

No provision is made in the Act for the Ministry of Finance to have oversight of the level of fees being set by the regulator and this should be corrected to ensure that such fees are set at reasonable levels.

        Cancellation of registration

Clause 12 (1) (k) provides for cancellation of the MFI license of a subsidiary of a Banking institution that has ceased to operate or been deregistered. The Committee’s considered view is that where the MFI is an independent company, it should not be affected by deregistration of an associated or parent company.

Public notice of registration and cancellation of registration

Clause 13 provides that the Registrar publishes every registration as well as cancellation of registration of a microfinancier. For purposes of reducing expenses, the Committee urges the Minister to consider revising the clause and allow the RBZ to publish the registration and cancellation through the available means that are available to the RBZ at the moment including Monetary Policy Statement and the RBZ website.

Requirements for loan agreements

In so far as the clause which spells out requirements for a loan agreement, the Committee urges the Minister to extend this to incorporate lease agreements to the clause as some of the transactions might involve leases.

        Principal Officers of a microfinance institution

Clause 31 (2) compels an MFI to notify the Registrar of the appointment of a chief executive officer and chief accounting officer. It is recommended that the requirement should be to seek regulatory approval prior to the appointment and not post the appointment.

Requirements for lending by microfinance institutions

         Clause 26, (3) (b) states that, if a microfinance institution makes a loan or advance without complying with subsections (1) or (2), in other words, informing the debtor of the implications of what he or she is doing, the capital sum of the loan or advance shall not be recoverable unless a competent court has condoned the institution’s failure to comply with the provisions concerned. The Committee feels that the provision is draconian and puts a disproportionate burden on the lender and urges the Minister to revisit the provision to allow only the loss of interest payable on the loan or advance.

        Expenses of investigation

                 As far as expenses for the investigations are concerned, Madam Speaker, Clause 41, provides for the recovery of expenses from an institution which has been investigated. The Committee recommends that the expenses be recovered from the fines levied against institutions found guilty of the offence or offences.

         Disciplinary Committee

As provided for in Clause 45, this spells out the composition of the disciplinary committee for purposes of an investigation. The Committee requests the Minister to consider an additional member from the Consumer Council of Zimbabwe, being the watchdog of consumer rights. In addition, the Association of microfinance institutions requested that a representative of their Association be included to represent the interests of the industry and the Committee felt that this was a reasonable request.

The Minister should note that the subsequent section 46, the draft actually refers to the Secretary of the Committee without any provision for such a post or any description of the Secretary’s function.  This should be corrected.

Madam Speaker, this Bill is an important addition to our legislative framework and it provides adequate measures that seek the protection of both the depositors and borrowers from MFIs.  The Bill also promotes Government’s efforts to ensure financial inclusion of the

previously ignored sections of society.  Thank you Madam Speaker

  1. MUDARIKWA: Thank you Madam Speaker. The issue of micro finance is just one of our national problems in Zimbabwe.  Zimbabweans have no confidence in the banking sector.  Zimbabweans have no confidence in most of these money lending institutions because, as stated in the Micro Finance Act, the main player is the Reserve Bank.  The Reserve Bank issues out the licence, does the evaluation and the monitoring of the microfinance.  There is a need for another player to register the microfinance, then the Reserve Bank does the monitoring.

There is more money circulating outside the banks in Zimbabwe because people have no confidence in the banks and in the Reserve Bank.  In my communal land, Madam Speaker, there is a song that people sing which says, dzimba mbiri dzandakavenga, chipatara nebank.  Two institutions that I do not want to see are the hospital and the bank because in the hospital, you walk in and then you come out through the mortuary.  Then the bank, you put your money and you will never get the money.

So, what is actually needed is a paradigm shift on the current situation where we have one institution doing everything.  The current Micro-Finance Act, actually if you borrow US$5 000, you pay $1 000 administration fee, 50% per month and other charges.  If you convert all the costs, it comes out to something like 1 000% per annum.  Most of these people who own the microfinance institutions have been in this bank, they run it down and go to the next bank and they run it down again.  There is no provision in the Act where we actually blacklist the individual.  We have been blacklisting companies and not individuals.

There are certain individuals who must actually be banned to say they must never be seen say, 10 m away from any banking institutions because they have taken our people for a ride.  Most of the Zimbabwean bankers, when you see them walk, they walk like a baboon because they are always looking at the back thinking that somebody is going to ask them to say, where is my money.  We have taken Zimbabweans for a ride for too long and time has now come for us to correct the situation because we cannot have a nation where people deposit their money and it also disappears.

Also as Government, we have also taken people for a ride.  We budgeted US$6 million to retire the Zim Dollar and this money was never given to our people.  This propensity to steal from people emanates from Government, goes to the Reserve Bank and then to the banks.  This is unacceptable and we must not allow such a situation to continue.  In East Africa, the microfinance controls the banking industry.

It is cheaper to borrow from the microfinance because there is sanity.  There is no element where you just get a few guys controlling everything.  All these bankers, for example here in Zimbabwe, every Sunday they go to church to ask God to pardon them for the crimes that they have committed to the people.  That is the money that they have stolen from the people.

We also face a situation in the current scenario in most of the microfinance institutions where, after you have signed everything, you supply the security and you sign the forms that are known as voluntary surrender forms.  They come at anytime of the day and take away everything.  Also, they have illegal debt collectors who just come, take everything without consulting the court.  They do not even go to court but just come, take and go.  Even on our pay slips, these criminals are allowed to advertise and it shows that the people running the microfinances are part and parcel of the financial services of this country.

The other major problem we also face is that of the growth of microfinance institutions.  We must allow people to invest money and if we allow them to do so, we must not stop them from withdrawing their funds.  This is the major problem that we are facing.  For example, just to bring your attention to the new Income Tax Act coming, we must not continue to give unnecessary controls.  Also, Minister, we have a situation in Murewa where Michael King gave money to farmers and the farmers sold their maize to GMB.  GMB is a State institution and it is protected by law and you cannot attach anything from GMB.

The Hon. Minister is a lawyer and so, GMB is an accomplice to theft because people are now continuing to pay interest whilst their money in GMB is not earning any interest.  So, if parastatals have no money, they must not take anything from the public.  It is supposed to be the opposite.  People must not give a subsidy to parastatals but it is the parastatals that should actually give the subsidy to people.

The other thing is the issue of one-year licences, it does not work.

Where on earth do you get a financial institution with a yearly licence?

Most of these financial deals are 5 year, 10 year and you need more time to go.  Madam Speaker, I want to thank the Minister for wanting to bring sanity in the financial services of this country but he must also move into the banking sector and also into the insurance sector.  I had a life policy where I contributed for 42 years and what I am going to get is $32.  This means, I am going to be earning less than a dollar a year for my contributions from Old Mutual and here we say, our Old Mutual is doing very well.

As Government, we are supposed to protect the poor people but we are actually assisting these institutions to steal from the poor people to make sure the poor people remain very poor so that we implement the unnecessary controls over our people.

Finally Madam Speaker, the other thing the Minister must at this stage look at is the issue of how one determines, like what came out in the paper - microfinance, the capital requirement was $25 000 and all of a sudden tomorrow, it is going to be $5 million.  This is what killed most of the indigenous people who were in the insurance industry because all of a sudden the figures shot up.  This is also what is killing some of the banks because all of a sudden the figures shot up.  Then, why is it that in any situation where a bank collapses, those people if they are to be arrested, they just go to Harare Central for two hours, they come back and continue to create another bank.  We must come to a situation as Parliament where there are these controls.

Lastly Madam Speaker, we need to create a situation where these microfinance institutions can be situated in different parts of the country but major banks must be told that yes, so much money must go to this industry – agriculture, financing industry.  The situation should not be as is happening now whereby in most of the banks and the microfinance institutions, no money goes to the productive sector.  It is all going to consumption.

So, this is what I feel must be looked at.  Madam Speaker, I want to thank you for allowing me to contribute and I also thank the Minister for trying to deal with this very difficult situation.  He has to continue with the whole thing and we also want to find out when the Minister is going to do amendments to the Banking Act but the Minister must allow the Committee on Budget and Finance to do public hearings so that when people come here, we discuss and debate from an informed position, what the people of Zimbabwe have said.

  1. HOVE:  Thank you Madam Speaker.  Firstly, I would like to commend the Minister of Finance for bringing such a noble Bill to this House. However, there are about three issues I would want the minister to revisit or at least explain in order to protect the depositors who are going to entrust Micro Finance Institutions with their cash.

On Clause 30, it says, “no Micro Finance shall knowingly extend credit to…”. In law, we are told ignorance has no defence, so when you say knowingly - if someone pleads that I did not know then that would lead to the person going scot free according to this Act. On that same clause it says, “any person who holds a significant interest in the institution…” should not be extended loan”. Again, what is significant? Are we saying people who hold something less significant can access loans? I feel the minister needs to look at anyone who has an interest in terms of shares no matter how little or huge, should never be allowed to borrow from those institutions because they will take advantage.

We have situations whereby someone like myself, I can divide my shareholding amongst my children to make sure that I qualify to get these loans. I will say my son Eugene, will get 5% or 10% then my daughter Maureen will get another. At the end I will use that to access loans or use my interest to access loans.

Another clause which I feel the minister should take a closer look to ensure that he tightens the screws, is the issue of Micro Finance  Project Promoters.  I feel they should never be allowed to be directors of the Micro Finance Institution. They should never be directors. They should excuse themselves from running that institution and should surrender it to professionals to ensure that there is no conflict of interest.

On Clause 37, I feel that there needs to be an addition in that whoever would have lost or prejudices his investment in that Micro Finance Institution, he needs some form of restitution because we have instances whereby if a Micro Finance Institution has been registered as a company, you will find that much reference is to talk about fines of level 5 or level 10. I feel there needs to be an inclusion of restitution of investors and that restitution should go on to people who would have caused that loss to have happened. In that way it will protect investors and the general public.

THE MINISTER OF FINANCE:  I really want to thank the hon. members that have contributed to this important debate Hon. Cross representing the Budget Committee, Hon. Mudarikwa and Hon. Hove. I think they have all made very good points and I will respond to them.

As I explained last week, you will recall hon. members that we gazetted the Bill in November of last year and I would have liked a situation where there will be fuller public consultations but that has not happened, including the Securities Commission Bill. I appreciate the comments that have been made which really reflect that people are thinking seriously about these issues.

I want to deal with the comments made by Hon. Hove and just say that your point about visiting liability on the owners or founders of these institutions is very important. We did not do it for the Micro Finance Bill because we have separated deposit taking micro finance institutions which will be covered by the Deposit Protection Fund and then the smaller lenders.

Hon. Mudarikwa, you asked a very important question – when is the Banking Amendment coming? I am pleased to say that we approved the major amendments last week and I hope that in the next two weeks they will be gazetted. I want to tell hon. members that one of the things that the Banking Amendments will do is to actually lift the corporate veil, pierce the corporate veil and deal with the issue of a shareholder particularly the dominant shareholder who is the shareholder, the board and the management. Where that bank has collapsed, depositors’ money have been eaten, for lack of a better word, we can pierce the corporate veil.

I want to say in terms of the law, a law cannot be applied retrospectively. The question was, do these criminal provisions of criminalising shareholders for the sins of their bank in the event of default, should they apply retrospectively? Some of us argued like lawyers that you cannot do that. The strong position by members of the Cabinet Committee on Legislation was that it should apply retrospectively. We are going to go to Cabinet next week, I do not know how it will sail but I am raising this that there is a strong feeling that you cannot have a situation where banks default and ordinary people suffer, yet the owners of these banks are seen driving funny things parked at Sam Levy Village. So, that is coming.

On the issue of your comments around Section 30, you asked correctly two things. The first is, no Micro Finance shall knowingly extend credit for the benefit of any offence. It does not add anything whether we remove the word, “knowingly” or not. It does not take away anything. When you commit a crimes your mental intention is important. If you go into a court of law, the court will have to ask about your mental intention. There are two things that are tested when you commit a crime, that is, you actually have a mental intention and did you actually commit the offence? There are times when you have the mental intention but you do not commit the offence.  For example, if I buy a twist of tomatoes and smoke them thinking that they are dagga, I have not committed an offence in terms of Section 9 of the Dangerous Drugs Act. I wanted to but smoking tomatoes is not illegal. The more fundamental question you raise is, what is a relative? The answer is in the Act because the Act itself is saying, “…which exceeds such percentage as may be prescribed”. The regulator is going to prescribe the level of percentage and that is where your question comes in of why the founders should be allowed to own Micro Finances. The law will prescribe a certain percentage.

I will just tell you what we have done for the Banking Act. For the

Banking Act, we have said if you are an individual - if you are John Chibadura from Dotito, you cannot have more than 10% of a bank in your own right. If you incorporate yourself into a company, you cannot own more than 25% but of course this does not apply to holding companies, provided the holding company itself complies with that rule and fortunately, it is now an international rule.

Hon. Mudarikwa, I really appreciate the comments and the concerns. This is something which we should have done a long time ago because people are being abused by Micro Finance and its institutions. Mr. Speaker, I now want to move on to the Chairman of the committee or the Acting Chairman. We have made three distinctions. We have got a Deposit Taking Micro-Finance Institution, a Non-Deposit Taking Micro-Finance Institution and a Money Lender Mr. Cross. In the original draft, we do not have a money lender. The money lender is an individual. The Micro-Finance Institution has to be incorporated as a company.

So when we raise this, there was a strong feeling that you are now discriminating because if I want to incorporate my business as a sole trader and if I want to incorporate as a private limited company, I should have that right. There was a strong feeling that it will be unconstitutional to determine whether I want to operate as Nyamuzihwa, or I want to operate as Ex-Private Limited and so forth. Some also said that insisting that we all have Private Limited companies would be an unnecessary hindrance to the real small people who also want to enter into this. That is why we reached on this compromise. That is the background.

Our own draft from the ministry had two distinctions, Deposit

Taking Micro-Finance Institutions and Non-Deposit Taking MicroFinance Institutions. So the point is well taken but I think those who argue that it is unconstitutional are right. If I want to operate my business as John Dotito, that is fine and if I want to operate my business as Eddie Cross Pvt. Ltd, that is fine and that is also my constitutional right. I am sure that the Chairman of the committee would agree with those who made us change the Bill.

I also take your comment on the absence of the definition in the Banking Act on Financial Institutions. Those are minor amendments that we will deal with in the Finance Act. We are going to come up with a Finance Act in June when we do the Mid Term Statement. So some of these minor things, we will deal with them there. I also agree with you that on the issue of the one year licence duration; let us take the model of the search. The Securities Act and we give a licence in perpetuity which is subject to that. I also agree that the Minister should have the power of regulation on the capital requirements.

For the burning Act, we have actually given that power. So I think it is another amendment that we will effect. I also agree with you that we need to put someone from the Consumer Council of Zimbabwe in respect of Section 45. I have no problem at all with putting someone from the members of your Committee. I know you are arguing from self interest and we are going to do that. Those are the things that I happily agree with you.

There are things that I do not agree with you and I will explain why. The first one is your suggestion that if a bank is operating a subsidiary, that subsidiary should not be covered by the Micro-Finance Act. We have to do that because what happens is that if you look at the definition of banking, banking only covers those classifications of banking which are covered in Section 6 of the Banking Act. So if it is a subsidiary, it is a new company in another business. Part of the problem in our current Banking Act is that a bank is allowed to participate even in retail. One of the things that have been happening nowadays is that a customer of a bank defaults. His security was Chiendambuya Supermarket. Then the bank says we are now taking over the supermarket but it is a non performing loan. So once it is a non performing loan, then the provision of bad debts in the accounts must apply.

So we should actually restrict the issue of subsidiaries doing all kinds of things and when they do any other kind of thing, they should be regulated by that particular law in that particular industry and that is what we are doing. It also applies to your contention that when a bank collapses, this is what you are arguing. You are saying if a bank collapses and it had a subsidiary that was doing Micro Finance; the Micro Finance should not be de-licenced. On the experience of what we have seen in the last two, three years, you actually have to deregister everything because of the collateral effect. One of the things that have been happening, I know you have read the reports, is that you have a holding company like in the case of Renaissance. You had a

Renaissance Holdings which owns the bank. Renaissance Holdings also owned shares and are free. Renaissance Holdings also owned shares in Rainbow Tourism Group.

All these coterie of companies became feja, feja. An omission happening in the company is hidden in the insurance company. An omission in the insurance company is hidden in the Rainbow Tourism

Group. So I think that once a bank has defaulted, in fact in the Banking Act we have said when the Reserve Bank issues curatorship against a bank, that curatorship must also affect other associated companies because part of the problem is that if the bank collapses, but the shareholders remain reproducing themselves in other businesses where the capital was being siphoned in the first place, to feed these other beasts where they were operating from.

So it will be wrong to demarcate. I do not agree with you on that one. I also do not agree with you that notification should not take place as defined in the Act. The issue of registering a Micro Finance is so important. You cannot wait for a Monetary Policy Statement by the RBZ to say let us gazette, just like we do banks, that this one is operating and this one is not operating. The most important thing is that you suggest that where an illegal lending has been made, this law is saying, if you lend money not in accordance with this Act, either in terms of whether you are registered or not or you are breaching the lending requirements. You are doing what honourable Mudarikwa was saying that interest can go to a thousand percent. In this Act, we are saying the transaction becomes void not voidable. In other words, if you give me US$2 000.00, it becomes void. If you give me US$500.00, whatever the Micro Finance Act will provide, you have not complied with the law.

The person who suffers is the lender. The suggestion from the committee is that there should be no taking away of their interest. If you take away their interest, they will keep on coming back. So to make sure that there is proper compliance with this law and to make sure that we do not have Shylocks in this economy, let us hit them where it hurts most. If you do an illegal transaction, it is void and not voidable. When we did public consultations, this was one of the most popular things, this particular provision.

So I differ with you on that one. The issue of US$5 million is very important because a Deposit Taking Micro Finance Institution is a bank by another name. If you are going to deposit your money in any institution, somebody has to have his own money. So he must show that he has got some money, not US$12 million or US$20 million like a bank. But, if I am going to put my money in yours, you must not make your money from my money that I have put for you, which is the problem with most of us vanaNyamuzihwa, navanaGushungo. You must not make money with someone’s money. If I say I am keeping someone’s money, I should also show that I have my own money. If you do not have money, we will give you just a Micro Finance, but if you are going to take our money, kuti zveshuwa mari yangu iri hard earned, I earn US$800 ndonoisa mari yangu imomo, unofanira kuratidza kuti uneyakowo. 

So there, I also disagree with you. Show us that you are a woman or a man and you have got your own money. Then we can also put our money in there. I see no reason with US$5 million. I undertake some of these small amendments; we will do them in the Finance Act like the Licencing one which is coming very soon. June is very close by but with others I respectfully beg to differ with the committee, but I appreciate all the points that they have raised. I thank you very much Madam Speaker.

        Motion put and agreed to.

Bill read a second time.

Committee: with leave forthwith.



House in Committee.

Clauses 1 to 63 put and agreed to.

First and Second Schedules put and agreed to.

House resumed.

Bill reported without amendments

Third Reading: With leave; forthwith.



THE MINISTER OF FINANCE: Madam Speaker, I move that

the Bill be now read the third time.

Motion put and agreed to.

Bill read the third time.




Sixth Order read:  Adjourned debate on motion on the Second Reading of the Securities Amendment Bill, (H.B. 1, 2012).

Question again proposed.

  1. CROSS: Madam Speaker, again I would like to express my appreciation to the Minister for permitting the Committee on Budget and Finance time to do consultations on this amendment. The operation of the Stock Exchange in Zimbabwe is an extremely important economic function.  It is an institution which is likely to play an important role in the long term development of the country.  Therefore, these amendments are important to all of us.  It is a highly technical subject Madam Speaker and I hope that the House will be patient with me while I present these requests to the Minister.

We consulted both the Stock Exchange itself and the representatives of the brokers and they made the following representations to us.

On the question of methodology, the Committee received oral evidence from the Stock Exchange after the institution had itself conducted consultations with stockbrokers.  Officials from Asset Management Company also made their submissions to the Committee.

The Committee’s findings:

Amendment of Section 2, the Interpretation

The Committee proposes a number of amendments to the  definitions contained in the Bill.  Amongst them, we proposed the  following:

“Investment advisor” would mean a person who gives other persons investment advice or recommendations (including about holding and disposing of investments) in relation to securities or other assets.

“Principal officer” of registered exchange, means a person who is responsible for the daily management of the principal office in Zimbabwe of the institution.

“Compliance officer” means a person employed by any licenced exchange responsible for ensuring compliance with the Act.

“Records” they made strong representations in this respect Madam Speaker, of a registered exchange, means documents and information in the ordinary course of business of the institution, whether in written form or kept on microfilm magnetic tape or any other form of mechanical or electronic medium.  They pointed out to us Madam Speaker, that the present definition, in fact, precludes such modern means of data collection.

“Securities” means each of the following

  • shares in or debentures of a company, a corporation or an unincorporated body;
  • stock, bonds, certificates of deposit or depository receipts of treasury bills issued or proposed to be issues by the Government; (c) interest and instruments prescribed for the purpose of this definition; and

(d) derivatives

“Extension of time” means that the Commission may, on application, extend the time for compliance with, or a period prescribed by a provision of the financial services law, and may do so before or after the time for compliance of the period prescribed has passed.

“Securities dealer” means any of the following-

  • a member of the securities exchange as defined by the Act;
  • a person who buys or sells securities on behalf of other persons;

(b) a person who regularly buys or sells securities on his own behalf otherwise than through a licensed securities dealer;

“Securities exchange”  the interpretation of security exchange Madam Speaker, means a market, exchange, place or facility that provides for bringing together on a regular basis, buyers and sellers of securities to negotiate or conclude sales of securities.

“Self regulatory organisation” means a body declared to be a self

regulatory in terms of sub section 15 (1)

“Self regulatory organisation arrangements” means arrangements described in subsection 15 (2)

“Stock broker” means a person who carries out :-

  • the business of purchasing and selling or purchasing or selling listed securities on behalf of other persons; or
  • regularly purchases and sells or purchases or sells listed securities on his own behalf.

        Disclosures by investors

The Committee’s view is that there is need to include a section on “Disclosure of information” where an investor has acquired 15% of issued capital of a listed company.  In other words where an individual investor bears more than 15% of the listed company, he should be required to notify the exchange of that fact.


The Committee proposes that the market side communication from the Stock Exchange Commission should be channeled through the securities exchange. Communication to individual stockbroker dealers or firms should only be undertaken in the course of investigation.

        Anti-Money Laundering requirements

The Committee feels that there should be provision in the amendments for the commission to take action against money laundering and other illicit activities which might be involving any of the exchangers under his jurisdiction.  There is no provision at the moment in this Act. In addition to these provisions Madam Speaker, the Stock Exchange requested that the Minister incorporates a section on self regulating organisations in the Act.  This has, in fact, been excluded from the Act altogether and in fact they make a substantial provisory on the specific wording as they require in the Act.  I would prefer not to read to the House this afternoon but to convey this to the Minister in writing.

In addition, the Stock Exchange has requested that the term

“stockbrokers’ license” should be referred to as a “stockbroking license” and not a securities dealer.  This will lead to the traditions of the Stock Exchange and they will regard stockbrokers as highly professional individuals in their right.  They feel that there is need to retain this term in the amendments to the Act.

         Madam Speaker, the Committee acknowledges the critical role that the Stock Exchange plays in the economy and it is looking forward to other exchanges being established in due course in Zimbabwe.  The establishment of the Securities Commission should boost investor confidence and ensure that the activities on the market are fair and efficient. The Committee recommends the Bill in its present form to the House.  I thank you.

THE DEPUTY SPEAKER:  Order, Honourable Cross, can you

go and switch off that microphone.

THE MINISTER OF FINANCE:  Madam Speaker, once again, I

would like to thank the Committee for very valuable comments.  The definition sections, remember we are not covering them in this Bill but I think that the Committee is doing, is to propose improvements on what is existing but it is not the subject of this Bill.  What I would say is that because it is something new, I will take this to the Attorney General and we will look at it.  We can use the general amendment, the Banking Act or the Finance Act because they are not covered by this Bill.  I hope

Hon. Matshalaga, you see my point.

There are two issues which you raised.  The first one, I agree with you that if someone or an investor acquires a significant stake of 15%, I think there should be disclosure. So I agree with that one.

On the second one of anti-money laundering, I want to assure the Hon. Member that we have a comprehensive Bill that is going to deal with anti-money and terrorism which is consistent with the UN protocols.  In fact, right now we are actually on the threat of sanctions because of us not passing this Bill.  In fact on Thursday, the Cabinet Committee on Legislation is going to meet on that one.

The only one I disagree with you is the issue of self-regulation.  The problem with the Stock Exchange is that it has been run since 1893 when it was set up, it has been run like an old boys club – you know it.  So you cannot touch them.  They operate like a cabal.  They are hunting wolves and there are lots of incestuous things that happen which you know better than I – pushing a share price or collapsing a share price.

So, self regulation does not work anymore.

You actually now have four layers.  You have the Committee of the Stock Exchange which is the brokers themselves.  It is there and we are not dismantling it.  So they have their own internal self regulation on rules.  The Stock Exchange opens at twelve and we cannot control that, neither the Commission.  Then we have another new layer now – the

Board itself.  Then we have the Commission and then we have Government through the Ministry of Finance.

One of the problems with the Stock Exchange as currently constituted is that if you look at the current Stock Exchange Act, it just sets up a market.  There will be traders but it does not actually define who owns this market.

So the stock brokers actually become the players and the umpires and it is a result of this self-regulation.  One of the things why we are now moving towards demutualization is that we want people who are able to say we own this thing.  We are appointing a Board and this is best standard throughout the world, the issue of demutualization.

The second thing also which is partly covered by your desire of 15% disclosure is the issue of automation of trade and the Central Securities Depository (CSD) because once you have those now, it means that Mai Ezra can leave Chiendambuya and actually go on the back office and see who has bought shares.  What we are doing also in this Act is that, a lot of our people are operating through nominal companies.

Hon. Chinyadza buys a multiple share of companies – he is not there.

So you have Bindura Private Limited, Chiendambuya Private Limited.

Just to give an example, there is a businessman called Van

Hoogstraten – a notorious businessman.  It is the beauty of Parliament Mr. Speaker, I am protected by privilege.  So, he is a major shareholder in Hwange, he is a major shareholder in RTG.  Now, if you go to the Registrar of Rainbow Tourism Group, you will not find Van Hoogstraten anywhere but you will find Hamilton this and Hamilton that.  It is almost like 18 Hamilton Companies.  So, the issue now of the CSD, is that it obliges the piercing of the corporate veil.  So, if there is

Chiendambuya Private Limited, we must know that the principal of Chendambuya is Webster Chinyadza.  If we do the CSD, it might not be actually necessary but I think that one is a good thing to put it and we put it in the amendments to the Banking Act.

But, I appreciate Mr. Speaker the quality of the contributions, it shows that hon. members are doing their jobs and they are not mere rubber stamps of what the Executive does.  Because, sometimes the Executive can mislead Madam Speaker and I want to appreciate that and we will definitely take it into account.  On the other definitions which were not the subject of our Bill, I will refer to my officials some of whom are sitting there and the Attorney General and then we improve them.

Thank you very much Madam Speaker, zikomo kwambili.

Motion put and agreed to.

Bill read the second time.

Committee Stage: with leave forthwith.



House in Committee.

Clauses 1 to 38 put and agreed to.

Schedule put and agreed to.

House resumed.

Bill reported without amendments.

Third Reading: With leave; forthwith.



THE MINISTER OF FINANCE: I move that the Bill be now

read the third time.

Motion put and agreed to.

Bill read the third time.

On the motion of THE MINISTER OF FINANCE, the House adjourned at Twenty-eight Minutes to Five o’clock p.m.


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