MBCA Bank, a unit of South Africa’s Nedbank, has concluded a US$20 million, medium term line of credit with Afreximbank.
The main purpose of the credit line is to fund capital expenditure, mainly completing technology renewals and retooling programs to enhance productivity for both local and export markets.
MBCA Bank managing director Charity Jinya said funding under the deal would cater for clients keen to purchase or upgrade machinery, retool manufacturing operations and fund expansion programs in all the key sectors of the economy such as agriculture, mining, construction and the health sectors.
“At MBCA Bank, we understand that an economy can only perform well with state of the art equipment and healthy workers hence the specific inclusion of the health sector in our funding programs,” she said.
Tenures for the facility will be for periods of up to 60 months and will be subject to annual reviews at respective anniversary dates.
“Drawings under the facility may be in the form of direct advances, that is, loans and or letters of credit in line with client requirements,” Jinya said.
In its unaudited interim condensed financial results for the half year ended June 30 2014, the bank said it continued to support the country’s industrial sector, with loans and advances growing substantially.
Management said despite the growth in the loan book, the non-performing loan ratio at the end of June last year remained relatively low at 2,65 percent against an industry average of around 18 percent, demonstrating the quality of MBCA’s loan book in an extremely challenging economy.
A number of financial institutions in Zimbabwe continue to suffer the effects of non-performing loans as individuals and companies fail to service loans owing to deteriorating economic conditions.Advertisement