CBZ Bank has secured an US$80 million loan facility from the African Export-Import Bank (Afreximbank) aimed at bolstering trade financing and capital expenditure for Zimbabwe’s productive sectors.
The agreement was formalized during the 31st Afreximbank Annual Meetings 2024, held in the Bahamas on Wednesday. The loan has a three-year tenure with an option to extend for an additional two years, underscoring Afreximbank’s commitment to supporting African economies.
According to CBZ Bank, US$60 million of the facility will be allocated to prime exporters and small to medium-sized enterprises (SMEs) engaged in export activities. These funds will support financing for asset or machinery acquisitions, as well as provide working capital to manage inventory, supply chains, and both pre- and post-export business activities in Zimbabwe.
The remaining US$20 million will support the Afreximbank Trade Facilitation Programme Facility (AFTRAF). This non-funded line of credit will facilitate the issuance of guarantees and letters of credit, primarily aiding importers. The program aims to assist SMEs and large corporations across various sectors in utilizing non-funded options like guarantees and letters of credit to facilitate trade.
“This facility complements our existing funded line and specifically targets importers. It supports both SMEs and large corporations in various sectors to facilitate trade through non-funded options such as guarantees and letters of credit,” CBZ Bank stated. “AFTRAF is designed to enhance trade facilitation in line with the African Continental Free Trade Agreement (AfCFTA), promoting regional integration.”
The integration of Zimbabwe into the continental market through trade finance products and services aligns with the goals of AfCFTA. This initiative focuses on financial inclusion for SMEs, promoting local community development, and economic transformation by opening new markets and enhancing the competitiveness of SMEs both locally and regionally. It is also expected to create jobs and build resilient value chains amid global supply chain disruptions.
The facility will support export-generating industries, aiming to reduce Zimbabwe’s import bill and bolster key economic sectors such as mining, agriculture, manufacturing, and SME capacity building.
In a recent trading update for the period ending March 31, 2024, CBZ Bank reported a robust financial position, with loans and advances to customers reaching $7.12 trillion, supported by a $16.99 trillion customer deposit base.
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The bank also posted a strong financial performance, with consolidated inflation-adjusted operating revenue of $1.42 trillion from a total revenue of $2.38 trillion.
“This strong performance was driven by sustained growth in customer numbers, deposits, transactional activity, and the uptake of our comprehensive product range,” said Mrs. Rumbidzayi Jakanani, the group’s chief governance officer. She also highlighted the insurance operations, which closed with a $108.64 billion liability book supported by $50.09 billion in insurance and reinsurance assets.
Jakanani emphasized that the group maintains a solid capital and asset base, with a robust presence in digital channels anchoring its transactional volumes and values. She added that CBZ continues to leverage its market presence, innovation, and customer-centric strategy to maintain its competitive edge.
Looking ahead, CBZ Holdings, which owns the largest bank in the country in terms of assets and deposits, plans to reconfigure and position its business model to unlock long-term value for its stakeholders.
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