Ipec ensures value preservation for prescribed assets

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.
Staff reporter
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.