Zimbabwe’s largest building society by assets and market share, CABS, has secured a US$40m trade facility from Afreximbank for exporters as the private sector joins the government's push to generate more foreign currency for the economy.
The trade finance line of credit facility was signed Friday on the sidelines of the Intra-African Trade Fair underway in Cairo, Egypt.
CABS managing director Mehluli Mpofu reaffirmed the bank’s commitment to continue to play its part as one of the key financial service providers in Zimbabwe.
“One of our key priorities is to capacitate the export sectors of the economy by providing the requisite working capital and capital expenditure facilities. In this regard, we continue to work closely with enterprises in agriculture, mining, energy, manufacturing and tourism,” Mpofu said, adding the latest facility is in addition to the “other trade finance related facilities that we have received from the institution”.
He said the previous support from the pan African financial institution had made a “remarkable impact” on industry and commerce.
“We have improved capacity utilisation by enabling acquisition of new plant and machinery, we have enabled set up of new operations and expanded existing operations in export agriculture, mining, in addition to import substitution and food self-sufficiency initiatives,” Mpofu said.
“The resultant export revenues, in addition to improvements in employment numbers have positively impacted our economy. The ESG initiatives remain at the centre of our engagements.”
Until Friday’s signing, the bank had existing facilities with Afreximbank worth US$70m. This brings the total to US$110m, Mpofu said.
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Banks are turning to exporters for lending as they are assured of getting the foreign currency to repay the loans as they seek to maintain the default rate within acceptable levels.
In his mid-term Monetary Policy Statement, central bank governor John Mangudya said the aggregate non-performing ratio of 3,62% as of June 30, 2023, was within the bank’s risk appetite, as well as the internationally acceptable threshold of 5%.
The Afreximbank facility comes as Zimbabwe is battling to grow its export revenue after it dipped in the nine months to September to US$3,6bn from US$4,5bn in the comparable period last year, driven by a drop in commodity prices.
