ZIMBABWE stock exchange-listed NMB Bank on Thursday received a US$10 million five year loan from French development finance institution, PROPARCO, allowing the bank to expand its credit portfolio in a market starved of long term funding.
Proparco is a development finance Institution jointly controlled by Francaise de Developments (AFD) and public and private shareholders from the North and South.
Its mission is to catalyze private investment in emerging and developing countries with the aim of supporting growth, sustainable development and the achievement of the Millennium Development Goals (MDGs).
The signing ceremony for the loan took place at the Residence of the Ambassador of France to Zimbabwe Laurent Delahouse in the presence of Christophe Blanchot, regional representative of Proparco for southern Africa, NMB Bank chief Executive Officer James Mushore and Deputy Minister of foreign affairs Christopher Mutsvangwa.
Ambassador Delahouse said despite its political difficulties Zimbabwe, the European Union, still wanted to help the country.
“The European Union wants to come to Zimbabwe. We want to separate politics from business and hope this loan will benefit Zimbabwean firms,” he said.
Added Blanchot: “PROPARCO’s is keen to partner with a dynamic player such as NMB Bank to develop its medium and long term lending activity.
“This project which marks the first operation for PROPARCO in the Zimbabwean financial sector since the end of the 90s will contribute to support economic growth in the country. Through this transaction, PROPARCO also intends to play a catalytic role in attracting other foreign investors.”
The total amount of loans received by NMB from European development finance institutions is now slightly above US$20 million.
NMB CEO James Mushore said: “This will open more doors for us and assist us on our journey into a tier one bank.
“Currently we have short term and expensive money and this will allow us to fund business long term. At the core of our business is development and sustainability so when we lend money we want to do it.”
He said PROPARCO’s facility would allow NMB to finance the expansion of its credit portfolio in a market where funding is only available on a very short term basis. These long-term resources he said will enable NMB to extend the maturity of its financing for Zimbabwean businesses.Advertisement
“In a context of economic restructuring and high financing needs it will help the private sector to grow and to support the development of Zimbabwe,” he said.
With total assets of over US$230 million and a growing market share, NMB is a medium-size bank ranked in the top 10 in the Zimbabwean banking sector.
Foreign Affairs deputy minister Chris Mutsvangwa welcomed the facility saying it represented a rekindling Zimbabwe’s relationship with PROPARCO which was strained a decade ago due to a host of political and economic policies.
“We have worked with PROPARCO before and their commitment is shown in that they have quickly rushed in even with the little signs of recovery that are there,” he said.