LIVINGSTONE MARUFU
NMB Bank Limited has drawn down ZWL$1.6bn from a total of ZWL$2bn that has been set aside for the 2021/2022 summer cropping season as the bank taps into the vast potential of the agriculture sector, CEO Gerald Gore has said.
The ZWL$2bn was raised through agro-bonds which were fully subscribed, Gore said.
“So far we have drawn down ZWL$1.6bn which went towards the support of Capex and mechanisation which assisted farmers to buy centre pivots and all other equipment that they require on top of the working capital,” he told Business Times.
The remainder of the funds had been earmarked to support this year’s winter wheat season and farmers who do horticulture.
“We have targeted a wide range of farmers be it small scale, mid-tier and large scale farmers. What we also did is to support farmers along the value chain where we support the large firms which sub-contract small farmers to be productive,” Gore said.
The NMB chief said with big firms they already have the ready market hence the bank can advance the required amount to these corporates.
Locally, NMB’s interest rates range from 40% to 60%.
“Our interest rates mainly depend on the quality of the borrower, collateral and the amount that is available,” Gore said.
The bank last week received a €12.5m line of credit from the European Investment Bank (EIB) for lending to Zimbabwean exporting companies.
The loan facility which has a tenure of seven years will be available in United States dollar through the existing NMB branch network and will be in the form of short, medium or long term.
Gore said: “One of the longest facilities that we have got, it allows us to offer short term working capital facilities or medium to long term capital expenditure to our exporting entities. So whether they want to set up production facilities and acquire new technologies the facility will be available to support that.”
“So the EIB comes up to complement the effort that we are doing to fund the productive sectors that we are doing.”
The resource envelope 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 followed a similar package signed by EIB and First Capital Bank and a €15m deal signed with CABS last year.
Gore said the deal will help all exporters to increase exports in all productive sectors.
“The market has been starved of long term, fairly priced offshore credit facilities. This type of funding is key for our industries to retool, invest in new technologies and keep abreast with international trends in order to compete on the global arena,” Gore said.
