THE European Investment Bank (EIB) board has approved a plan to promote women’s entrepreneurship through providing funding to small-and-medium enterprises (SMEs) for its bigger plan for Zimbabwe and re-engagement effort.
The bank opened its doors to the country in 2022 after 22 years of a financial dry spell owing to debt arrears and has since rolled out a US$40 million credit line to three banks, namely NMB Bank, First Capital Bank and CABS. EIB is one of Zimbabwe’s major creditors and is owed US$434 million.
At a Press conference during the opening of the ongoing 2024 Africa Investment Forum Market Days, hosted by the African Development Bank (AfDB), in Rabat, Morocco, yesterday, EIB vice-president Ambroise Fayolle said the bank did not have a lot of networks in the field. However, he said EIB had a lot of financial institutions in the private sector that it could work with.
The EIB vice-president said the major priority for the bank in Africa was the promotion of women’s entrepreneurship, which was normally under SMEs.
“What we have done for Zimbabwe is in 2022, we re-engaged with private sector operations, in particular with banks. What we do is, we don’t have a network in the field, but there are a lot of financial institutions in Africa that do. We lend to banks, and we have facilities at four banks that lend to SMEs,” Fayolle said.
“We have done that for three banks since 2022. There is an approach that has been already approved by our board and the compost rate of signature, I have to say, has a special characteristic.
“It’s also a loan to banks which lend to SMEs, but with a special characteristic, which is a big priority we have in Africa, which is the promotion of women’s entrepreneurship.”
While the fourth bank remains anonymous, Fayolle said special attention was being given to loans for SMEs, especially to those led by women or mostly run by them.
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AfDB president Akinwumi Adesina said AfDB was also rendering support to Zimbabwe’s private sector as it worked on the country’s debt clearance strategy.
The fund contributes to the promotion of economic and social development in least developed African countries by providing concessional funding for projects and programmes, as well as technical assistance for studies and capacity-building activities.
“Also, to add to that, on lines of credit, we provided about US$25 million to the private sector. We also have provided US$15 million to the First Capital Bank in Zimbabwe and we’re just working on the US$100 million facility that will be with Old Mutual and CABS,” Adesina said. CABS is a subsidiary of Old Mutual Zimbabwe.
“We also have a lot of work that we are doing to support Zimbabwe on the private sector side, even as we are looking to see how we can deal with the arrears for the sovereign debt that Zimbabwe has,” Adesina added.
Zimbabwe’s public debt stood at US$21,06 billion as of September, with US$12,32 billion being external debt.
Adesina was in the country last week for the AfDB-led 6th High-Level Structured Dialogue Platform.
The bank has extended over US$4,2 million to facilitate dialogue on the country’s debt arrears.
“At the African Development Bank, we will continue to strongly support Zimbabwe, within the limits of what we are able to do, until the situation changes. The African Development Bank is strongly supporting the private sector in Zimbabwe,” Adesina said.
“Between 2023 and 2024, the bank provided a total of US$55 million in lines of credit, including US$25 million to CABS, a transaction guarantee of US$15 million to the NMB Bank and a US$15 million transaction guarantee to the First Capital Bank.”
The AIF is an annual event that is running under the theme Leveraging Innovative Partnerships for Scale. The forum is a multi-stakeholder, multi-disciplinary platform that advances projects to bankable stages, raises capital and accelerates deals to financial closure. Its vision is to channel capital towards critical sectors to achieve Sustainable Development Goals, AfDB’s High 5s and the African Union’s Agenda 2063.
The AfDB’s High 5s is an agenda that seek to Light up and Power Africa; Feed Africa; Industrialise Africa; Integrate Africa; and Improve the Quality of Life for the People of Africa.
