CBZHL seeks to raise US$500m

STAFF WRITER

CBZ Holdings Limited (CBZHL), a publicly traded financial services group, has set an ambitious target to raise US$500m in credit lines this year from both regional and international lenders, Business Times can report.

This strategic initiative, according to CBZHL, is designed to help address the country’s ongoing liquidity challenges and support broader economic growth.

The announcement follows on the heels of CBZHL successfully securing US$115m in credit lines in 2024.

While this achievement is noteworthy, has remained insufficient to meet the country’s pressing economic needs.

 

CBZHL CEO, Lawrence Nyazema, emphasized the group’s commitment to leveraging its robust balance sheet and market credibility to meet its 2025 goal.

Zimbabwe’s financial landscape continues to grapple with severe liquidity constraints in both local and foreign currencies. The situation has been exacerbated by the growing informal economy, which operates largely outside formal banking channels. Official data reveals that over US$2.5bn is circulating outside the formal financial system, depriving the banking sector of vital deposits.

Nyazema highlighted the critical role of credit lines in alleviating these pressures.

“In 2024, we secured US$115m, which we initially thought was substantial. However, it quickly became apparent that the economy requires much more. With that realization, we have set an even larger target for 2025,” he said.

CBZHL is now aiming to raise at least US$500m in credit lines this year, a significant increase from its previous efforts.

Nyazema expressed optimism about the group’s ability to achieve this target, citing CBZ’s strong financial position as a key enabler.

“Our target for 2025 is US$500m, and we believe that even if we achieve a portion of that, it will make a substantial impact. The liquidity crunch, which has been a persistent challenge, could be mitigated significantly. As the largest player in Zimbabwe’s financial services sector, it is our responsibility to lead in mobilizing resources. Our strong balance sheet and credibility give us the capacity to do so,” Nyazema said.

He added: “Even if we don’t fully achieve this target, the ambition itself drives our efforts. This remains a critical goal for us as we strive to support economic recovery.”

One of the challenges facing the banking sector is the stagnation in deposit growth, largely due to the high rate of informalization in the economy. CBZHL is exploring strategies to attract deposits from informal sector players, who currently contribute minimally to the formal banking system.

Nyazema outlined a two-pronged approach to address this issue.

“First, we need to attract deposits already circulating in the formal sector. Although we receive deposits from informal players seeking goods and services, these are often not retained. Second, we must rely on external sources, which is where the lines of credit become crucial,” he explained.

CBZHL’s strong financial performance in 2024 underscores its capacity to deliver on its ambitious targets.

For the period ended September 30, 2024, the group reported a profit after tax of ZWG1.01bn and total income of ZWG2.68bn.

This performance was underpinned by a solid asset base of ZWG30.05bn, a diverse product offering, and a competitive strategy.

CBZHL also maintained a robust deposit base of ZWG18.51bn, which provided a key funding source for lending activities across critical sectors of the economy.

Nyazema credited the group’s consistent growth to its ability to leverage core strengths effectively. “Our strong market presence, supported by a stable deposit base, enables us to support lending activities while managing liquidity effectively. This positions us well to pursue our 2025 credit line target,” he said.

Nyazema noted that the global interest rate environment has softened, creating favorable conditions for securing credit lines.

This trend is expected to provide relief to borrowers, stimulate credit expansion, and ultimately boost economic activity.

“With lower global interest rates, we anticipate greater access to affordable credit lines. This will not only benefit CBZHL but also provide much-needed liquidity to the broader economy. By deploying capital strategically, we aim to unlock long-term value for all our stakeholders,” he said.

CBZHL’s aggressive credit line target aligns with its broader mission to drive economic growth and support the productive sectors of the economy. The group remains committed to deploying its resources toward initiatives that generate sustainable value for its stakeholders.

“As a leading financial institution, we recognize our role in supporting the economy through targeted interventions. By raising substantial credit lines, we can address the liquidity challenges that have hindered growth and unlock opportunities for the productive sector,” Nyazema concluded.

While the US$500m target is ambitious, CBZHL’s track record of strong financial performance and its strategic focus on leveraging external and internal resources position it as a key player in Zimbabwe’s economic recovery.

As the group moves forward, it will be crucial to engage both local and international stakeholders to secure the necessary funding.

If successful, CBZHL’s efforts could significantly reduce liquidity pressures, foster economic growth, and cement its position as a leader in Zimbabwe’s financial sector.

By maintaining its focus on innovation, strategic partnerships, and robust financial management, CBZHL is poised to play a transformative role in Zimbabwe’s economic landscape in 2025 and beyond.

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