CBZ eyes US$400m credit lines

LIVINGSTONE MARUFU

CBZ Holdings Limited (CBZHL) is eyeing between US$300m and US$400m in regional and international credit lines by year-end, Business Times can report.

The ambitious funding drive comes just days after the financial services group secured US$190m in financing facilities from the African Export-Import Bank (Afreximbank), reinforcing its role in supporting trade, infrastructure development and economic growth.

CBZHL chairman Luxon Zembe said the group, as one of the leading financial services institution in Zimbabwe, had a responsibility to lead efforts to mobilise offshore capital despite a challenging domestic and global operating environment.

“CBZ is out there in the global market mobilising resources,” Zembe told Business Times.

“We are pleased that despite the domestic headwinds, including the anticipated drought, and global challenges such as the geopolitical conflicts in Russia, Ukraine and the Middle East, we have still been able to secure meaningful lines of credit.

“All things being equal, by the end of this year we expect to have mobilised between US$300 million and US$400 million in credit lines in support of the productive sectors of the economy.”

He appealed to policymakers to continue improving the investment climate, saying Zimbabwe’s country risk remains a major obstacle when local banks seek funding from international lenders.

“Our plea to the authorities is to continue supporting the banking sector by creating a conducive environment so that the country’s risk profile is no longer a deterrent when banks are raising capital on global markets,” Zembe said.

“These credit lines provide medium- to long-term funding because most of the deposits in the banking sector are held in current accounts. Those funds are transitory, they come in today and may be withdrawn tomorrow, making them unsuitable for long-term lending.”

He said restoring confidence in the economy would be critical to unlocking sustainable offshore funding.

“The challenge in attracting medium- to long-term funding is the loss of trust and confidence in the economy, more importantly driven by government and regulatory policies. Banks are simply financial intermediaries.”

His remarks come after CBZ Bank concluded US$190m in financing facilities with Afreximbank, a landmark transaction expected to strengthen Zimbabwe’s trade finance capacity, expand support for small businesses and help address the country’s energy challenges.

The agreements were signed in El Alamein, Egypt, in June by Haytham Elmaayergi, Executive Vice President for Global Trade Bank at Afreximbank, and Valeta Mthimkhulu, Managing Director of CBZ Bank.

The financing package comprises three facilities aimed at expanding access to funding across strategic sectors of the economy.

The largest component is a US$150m revolving trade finance facility, which will enable CBZ Bank to provide trade finance and letters of credit to Zimbabwean companies, helping bridge Africa’s trade finance gap.

A US$20m dual-tranche SME finance facility will strengthen the bank’s capacity to support small and medium-sized enterprises engaged in trade and other productive activities while providing technical and capacity-building support.

The third facility, also valued at US$20m, is an on-lending arrangement designed to support energy projects. It positions CBZ Bank to participate in an approved US$210m syndicated dual-tranche facility for the Zimbabwe Electricity Transmission and Distribution Company (ZETDC), helping reduce power shortages and improve electricity supply in Zimbabwe and the wider Southern African region.

Elmaayergi said the facilities would strengthen export-oriented businesses by improving access to finance, enabling companies to generate foreign currency while supporting Zimbabwe’s economic growth.

He added that Afreximbank’s SME and trade finance interventions extend beyond funding to include legal and regulatory support, capacity building, strategic partnerships and awareness programmes.

Mthimkhulu said the agreements significantly enhanced CBZ Bank’s ability to provide financing solutions to businesses across the economy.

“Through this partnership, CBZ is better positioned to deliver financing solutions that unlock opportunities for clients across the spectrum. From exporters to small businesses, we remain committed to enabling growth while contributing to key national priorities, including energy development,” she said.