ZIMBABWE’S largest mortgage lender, Central African Building Society (CABS), this week signed a US$10 million five-year loan agreement with Proparco a French Development Finance Institution.
The partnership between CABS and Proparco is expected to help foster medium and long term credit to corporates and individuals, particularly in the mortgage sector.
CABS managing director Kevin Terry said the loan facility will help in consolidating CABS’s status as one of the providers of commercial banking services to individuals ,SME’s and corporate customers.
“Proparco’s loan will allow CABS to finance development of its credit portfolio and extend the maturity of its financing for Zimbabwean businesses as funding continues to be found on short term basis.
“In context of economic restructuring and multiple financing needs, such loan facilities will help the private sector to grow and support the development of the country,” said Terry.
Regional director of Agence Francaise de Development for Southern Africa, Jean-Michel Debrat, who was representing Proparco said the agreement was a sign of France’s willingness to engage Zimbabwe in trade on a long term basis.
“Despite the sanctions imposed by the European Union, France was interested in doing business in the country and more French companies are expressing their interest,” he said.
CABS said it would lend US$100 million in mortgaging financing this year and has doubled the repayment period in a boost for the property sector.
The bank has increased the tenure of the mortgage financing to 20 years from the 10 years that they have been offering since 2009, becoming the first bank to achieve such feat.
The bank said about 500 houses would be ready for allocation and application processes would be commencing shortly at its housing project in Budiriro. The project was launched last year and will result in the construction of 3 102 low cost houses over a five- year period.
Foreign Affairs Deputy Minister Ambassador Christopher Mutsvangwa who attended the loan signing ceremony said most French companies were showing great interest in investing in the country adding this was sending a strong signal to other investors from across the world.
He said the US$10 million loan signing will go a long way in meeting the needs of the country in terms of social and environmental responsibility.Advertisement
“This loan is a sign of trust in the country and in the bank itself. We are yet to overcome some reluctance internally but I am convinced that we have a good investment environment,” the Deputy Minister said.
Last month Proparco signed a US$10 million loan agreement with NMBZ.