THE Eastern and Southern African Trade and Development Bank Group (TDB Group) has extended a US$20 million revolving line of credit to CBZ Bank Limited earmarked for on-lending to eligible customers operating in the key export and hard currency sectors.
The facility, which was signed by the two parties in Harare on Monday, will be used for capital expenditure and working capital needs in a major boost for exporting companies.
This comes as the TDB Group has positioned itself to support member States’ banks by providing a number of solutions such as lines of credit to drive trade within the continent and the rest of the world.
“By actively collaborating with banks in our region, we play a vital role in strengthening our member States’ overall financial and banking ecosystems. Through our collective efforts, we not only foster growth but also promote advancement, ensuring that the region remains resilient and well-positioned to maximise future opportunities,” said coverage executive, Southern Africa Region Gift Moonga.
CBZ group chief executive officer Lawrence Nyazema said to date, TDB had extended over US$200 million to the financial institution.
“We have signed a US$20 million line of credit from TDB to CBZ. This is not the first facility that we are doing with TDB,” he said.
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“In fact, our relationship with regards to being provided with lines of credit goes back to 2007, and over that period, we have gotten at least US$200 million from TDB.
“Those funds have been distributed in the wider Zimbabwean economy, mostly the productive sector. In particular reference to the US$20 million line, it’s primarily targeted at exporters.”
Nyazema said the reason the bank was targeting exporters was to create repayment capacity so that when the tenure of the facility has reached its maturity, there would be foreign currency to repay TDB.
He said being able to fully repay facilities and lines of credit was important, not only to CBZ, but to the rest of local financial institutions.
“Should word go out there that for whatever reasons CBZ has failed to service its facility, it affects other financial institutions,” Nyazema said.
“Therefore, it’s important that we fully meet the terms and conditions of the line of credit. Again, with specific reference to the US$20 million, we have got a short-term working capital facility for up to one year, and then we’ve got a medium-term capex [capital expenditure] facility of up to three years. So it’s fairly flexible with regards to how we have structured it.”
The TDB’s line is the fourth facility CBZ has secured in three months from continental banks, underscoring its commitment to support local firms.
In June, CBZ secured two credit lines from Afreximbank worth US$80 million to support exporters.
The two credit lines comprise a US$60 million receivables-backed facility and a US$20 million tranche under Afreximbank’s Trade Facilitation Programme.
CBZ last week secured a US$15 million loan from Shelter Afrique Development Bank to finance housing projects and subsequent mortgage origination.