BY VANESSA GONYE
The Eastern and Southern Trade and Development Bank (TDB) has extended up to US$400 million loans to various sectors in Zimbabwe and the regional financial institution says it is committed to help resuscitate the country’s ailing economy.
TDB, formerly the PTA Bank, on Friday signed a three-year $1 million credit guarantee with NMB Bank, guaranteeing loans from the local financial institution to Untu Capital for on-lending to small businesses.
The guarantee, which was signed at TDB’s Southern Africa regional office in Harare, will enable NMB Bank to provide finance for small to medium enterprises (SMEs) through Untu Capital without requiring any collateral, since the loans are guaranteed by TDB. The three-year guarantee is scaleable to up to $6 million.
TDB also provided a technical assistance grant of $250 000 to enhance Untu’s ability to lend to SMEs.
The guarantee is the first of its kind to be extended by TDB under its SME programme, which was launched in 2018 to leverage on its seed capital in order to enable partner financial institutions to provide finance to SMEs.
Gloria Mamba, the TDB Southern Africa coverage and asset management executive, told Standardbusiness that the regional bank would not turn its back on Zimbabwe because of the country’s long running economic problems.
“Zimbabwe has been a shareholder in TDB for the past 35 years and we have enjoyed cordial relations and never had problems in the repayment of loans,” she said.
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“We have over US$400 million in loans in the country to a variety of sectors including health, financial and education.”
Mamba said the NMB and Untu Capital deal was a show of confidence in the Zimbabwean economy “What we have witnessed today is confirmation that we are still interested and committed to lend to SMEs in Zimbabwe,” she said.
Already, several small to medium enterprises as well as the health, financial services and other areas have received funding under the scheme.
Mamba said the bank was eager to see inclusive growth in Zimbabwe’s economy.
“This is a guarantee facility in local currency, which is expected to grow in the next three years to about $6 million; we hope to see numbers increasing throughout Zimbabwe as a result of this,” she added. “We are not only giving financial assistance, but we also want to see Untu growing.”
NMB Bank chief executive Ben Washaya said the financial institution was keen to partner SMEs and microfinance institutions such as Untu Capital to contribute to the growth and development of small businesses.
“The crucial role NMB Bank is playing in this transaction resonates well with our model of capacitating SMEs, which are the future of the Zimbabwean economy,” he said.
“We are pleased to be working with these key long-standing partners, namely TDB and Untu, in supporting the SME sector.
“This guarantee facility enhances our capacity to lend to this crucial sector and augments our current efforts to support SMEs,” he said.
It is estimated that SMEs contribute more than half of Zimbabwe’s Gross Domestic Product and employ more than 75% of the country’s workforce.
