NMB Bank on Wednesday signed a EUR 12.5 million-loan facility with the European Investment Bank (EIB) today. The facility will support business investment across export oriented sectors of the economy and exporting companies.
The loan facility has a seven-year tenure.
Speaking at the signing ceremony, NMB Chief Executive, Gerald Gore said the market has been starved of long term, fairly priced offshore credit facilities. “This type of funding is key for our industries to retool, invest in new technologies and keep abreast with international trends in order to compete on the global arena,”
Gore said that their focus for this line was to fund agriculture, horticulture and manufacturing exporting clients.
“The facility is not necessarily restricted to current NMB Bank customers, but open to exporters who want to scale up production and even new companies that are export-orientated. The intention is to complement the government’s efforts to promote exports and boost the country’s economy”, said Gore.
“Our main attraction to EIB is their developmental thrust as they seek to promote private investments in businesses that are economically viable, financially profitable, environmentally sustainable and socially equitable,” said Gore.
Head of EIB Regional Representation for Southern Africa and Indian Ocean Jim Hodges said, the EIB loan facility will strengthen private sector investment, create jobs and accelerate the post-pandemic recovery of Zimbabwe.
This is the third facility to be signed in the country after CABS in the previous year and First Capital Bank yesterday.
“Given the challenging economic environment we are pleased that more support will be locally available. The Zimbabwean private sector plays a big role in supporting employment, food security and access to export markets. Therefore, support for financial institutions and private sector enterprises creates an opportunity that has a significant impact on the lives of many citizens,” said Bernard De Schrevel, Head of Agriculture, Private Sector and Trade, European Union Delegation to Zimbabwe.
The Governor of the Reserve Bank of Zimbabwe, Dr. John Mangudya said, by focusing on the private sector development the loan facility must help in job and employment creation, exports, economic diversity and more economic growth in line with the NDS1 strategy.
“Indeed the private sector development is critical in the bid to grow and diversify the economy as it creates opportunities for the youth by employment, growing the SMEs, growing exports, growing public finances, revenues and expanding key sectors of the economy,” said Mangudya.
Furthermore, Mangudya said the facility provides pension capital that is required in the country that is essential for developing the economy and reduces pressure on the foreign exchange system. However, the balance of payment for the country remains positive on account of higher exports and high diaspora remittances.
The European Investment Bank (EIB) is a long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. EIB Global is the EIB Group’s new specialised arm dedicated to increasing the impact of international partnerships and development finance. EIB Global is designed to foster strong, focused partnership within Team Europe, alongside fellow development finance institutions, and civil society. EIB Global brings the Group closer to local people, companies and institutions through our offices across the world.