NMB Bank Limited has secured a US$15 million trade finance facility from the African Development (AfDB) for small-to-medium enterprises and corporates in the agribusiness and trade distribution value chains.
“The board of directors of the African Development Bank Group on Thursday, November 30, 2023 approved a US$15 million trade finance transaction guarantee facility for NMB Bank in Zimbabwe. This is AfDB’s first project with NMB, a registered commercial bank with strong SME credentials,” the Abidjan-headquartered bank said in a statement.
“This facility will provide 100% guarantee to international confirming banks) for the non-payment risk they take on NMB’s trade finance transactions conducted on behalf SMEs and local corporates active in agri-business and trade distribution value chains in Zimbabwe.”
The AfDB facility comes as NMB has mobilised foreign lines of credit of US$130 million since 2010, to support critical sectors of the economy.
Last month, NMB revealed that it had accessed €12,5 million from the European Investment Bank to support the horticultural industry and was in the process of drawing down US$10 million from Trade and Development Bank, the bulk of which will also go into horticulture.
The bank also announced it was working on securing more than US$55 million from two international institutions that had already conducted due diligence on the bank.
AfDB said the trade facility was projected to support more than US$100 million in total trade volumes by 2026 and by extension reduces the continent’s trade finance gap.
“It will also increase access to finance and support intra-Africa trade between Zimbabwe, Sadc, and the rest of Africa,” AfDB said.
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The support to SMEs comes as the informal sector, in which they operate, has a gross domestic product value of over US$8 billion.
AfDB’s Zimbabwe country manager Moono Mupotola said SMEs and other domestic firms had a harder time accessing trade finance than multinational and large local corporates.
“This transaction guarantee facility is, therefore, a timely and strategic tool that will enhance correspondent banking relationships for NMB and, in the process, help to reduce Zimbabwe’s trade finance gap,” she said.
AfDB’s trade finance head Lamin Drammeh added:
“This trade intervention speaks to the AfDB’s trade finance programme objectives to support SMEs, women-owned businesses, farmers and local enterprises/local corporates on the continent by connecting them into key value chains regionally and globally.”
