In excess of ZW$ 4,7 billion has been invested in Prescribed Assets by the insurance and pensions industry with the regulator having made approval of ZW$315 million worth of prescribed asset this year alone.
This in line with its thrust to ensure value preservation in these asset classes whilst ensuring the sector contributes to economic development. The approvals relates to a Z$250 million towards agricultural financing, Z$4,75 million for the Guruve solar project and Z$60 million towards the financing of SMEs to increase their output this year.
Prescribed assets are bonds or securities issued by the government, local authorities, quasi-government organizations or any other bond that may be accorded the prescribed asset status.
Last year government directed that short term insurers have 5% of their portfolio in prescribed assets.
However there has been an outcry over the performance of most available prescribed assets with the industry pleading with the regulator to oversee the expansion of prescribed asset status to other performing classes as available paper did not consummate with high inflation levels prevailing in the economy.
However Ipec commissioner Grace MIuradzikwa said the commissioner has been expanding approvals into prescribed assets to ensure that they do not only speak to governments developmental goals but to value preservation criteria of pension funds.
“ The industry has invested ZW4,7 billion in in prescribed assets. We have been expanding approvals for the paper so that so that they do only spoke to governments’ developmental goals but also speaking to the value preserving criteria for pension funds . Solar and renewable energy are of the areas we have been looking at and we intend to be focusing on such and other areas,” she said.
However the Zimbabwe Association of Pension Funds in its recent AGM hinted that compliance to prescribed assets continued to be a challenge due to lack of quality paper on the market but urgent its members to comply. According to ZAPF some of the projects that had been accorded prescribed asset status include Datvest – Baines Intercare hospital,Invesci Asset Management – Datlabs pharmaceutical , Invest Solar –Solar farm , Mangwana Capital – Agriculture, Zimnat – Agriculture, Old Mutual, Zimnat, Motor Industry PF and IDBZ – Zimcampus while ABC Asset Management project was still be considered by IPEC.
“Compliance to Prescribed Assets continues to be a challenge due to lack of quality paper on the market. The Association has been active in assisting private players to set up prescribed assets in the market,” said ZAPF.