First Capital Bank, EIB ink €12.5m deal

PHILLIMON MHLANGA

Leading financial services provider, First Capital Bank Limited  has signed a €12.5m deal with the European Investment Bank (EIB) to bailout Zimbabwe’s SMEs and midcap companies.

The loan facility has a tenure of seven years. Funding will be availed in United States dollars through the existing First Capital Bank Limited network.

The facility is part of the Zimbabwe Private Sector Facility from the Impact Finance Envelope of Investment Facility which is extended by EIB to a group of financial institutions located in Zimbabwe.

The deal follows a €15M  EIB deal signed with CABS last year.

Speaking at the signing ceremony held in the capital Harare on Tuesday, First Capital Bank Limited’s commercial director, Mutemwa Ushewokunze said the deal will “unlock a lot of opportunities within key sectors in our economy”.

“This partnership will address a challenge that has often prohibited the growth of many businesses, the unavailability of correctly priced long-term funding. Our primary focus is to avail funding to key productive sectors that will drive our economy forward. These are agriculture and manufacturing to name a few.”

Jim Hodges, the head of regional representation Southern Africa and Indian Ocean of the EIB said the deal will help accelerate Zimbabwe ‘s recovery post Covid-19 pandemic.

“The EIB is committed to ensuring that Zimbabwe entrepreneurs and businesses can invest through new cooperation with local financial partners. As part of Team Europe, the EIB is pleased to provide €12.5m of targeted financing to First Capital Bank to accelerate private sector investment, create jobs and accelerate the post pandemic recovery of Zimbabwe,” Hodges said.

Finance and Economic Development permanent secretary, George Guvamatanga said: “We applaud collaborative efforts such as this as they raise our profile as a nation and contribute significantly to our economic development.

This partnership is an additional to other existing facilities under the European Investment Bank with other financial institutions.

With EIB increasing its footprint, it is evidence of their confidence and trust in the abilities of our local banks. We are encouraged by this and look forward to more opportunities that can be availed to local businesses. It is up to us to exhibit our expertise and set up robust frameworks to ensure that maximum impact is realized through these efforts.”