The African Development Bank (AfDB) and NMB Bank Limited Zimbabwe (NMB) have signed a $15 million trade deal for Small and Medium Sised Enterprises in Zimbabwe.
It is a Trade Finance Transaction Guarantee Facility which will unlock trade finance opportunities for Zimbabwean SMEs and those in agri-business and trade distribution value chains.
The deal was signed in March 7 after it was approved by the lender’s board in November last year.
The facility offers up to 100% coverage to confirming Banks, effectively mitigating non-payment risks linked to NMB Bank’s trade transactions on a per-transaction basis.
It is tailored to support trade between Zimbabwe and other African countries and with overseas markets.
The facility aims to diminish the risk for international financial institutions actively engaging in trade finance activities with Zimbabwean businesses.
“This is a significant step forward in supporting the growth and competitiveness of Zimbabwean businesses.
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By mitigating risk and facilitating access to trade finance, we are empowering SMEs and local corporates to participate more actively in regional and international trade,” said Moono Mupotola, AfDB Country (Zimbabwe ) Manager.
The initiative will also address accessing trade finance and fostering a more vibrant and inclusive business environment in Zimbabwe.
“This facility will be instrumental in enabling NMB to provide crucial trade finance support to a wider range of Zimbabwean businesses.
This will not only unlock new trade opportunities but also contribute to job creation and economic growth,” said Gerald Gore, CEO of NMB Bank.
In December 2023, the AfDB board of directors approved a $20 million trade finance line of credit to the Central Africa Building Society (CABS).
The project is part of AfDB’s strategy for 2024-2026 paper plan for Zimbabwe which prioritises private sector development.
It is also aligned with several priorities of the Zimbabwe Vision 2030, which aims to transform Zimbabwe into a prosperous and empowered upper-middle-income society by 2030.
