POSB to raise US$20m
CLOUDINE MATOLA
The People’s Own Savings Bank (POSB) is set to raise US$20m through lines of credit and letters of credit to support Zimbabwean businesses this year, Business Times has established.
Speaking on the sidelines of the bank’s 11th Annual General Meeting held last week, POSB chief executive officer Garainashe Changunda confirmed the funding strategy, stating that the bank’s board has already given the green light.
“The board has authorized us to raise US$20m from lines of credit, including letters of credit,” Changunda said.
He also revealed that POSB recently secured US$10 million from the African Export-Import Bank (Afreximbank) to support companies importing goods into Zimbabwe.
“We are using lines of credit to expand our loan book,” he said. “I mentioned the US$10m letter of credit from the African Export-Import Bank (Afreximbank), so those who want to import products from abroad have access to that facility. Just recently, a few days ago, we established a US$1m facility for a certain company in Zimbabwe off the US$10m letter of credit. So, we are relying on lines of credit to grow our loan book, given the shortage of long-term capital in our economy.”
In a move to enhance operational efficiency and customer experience, POSB has also received board approval to invest US$12.5 million in upgrading its digital infrastructure.
“Our business model is very simple; we are here to make a difference in the lives of individuals, and we are also there to empower businesses so that they grow,” Changunda said.
“Basically, our thrust is to deliver an AI-powered digital bank. I did say earlier on that the board has authorised us to invest US$12.5 million in the digital technologies that we require. I’m talking about the core technologies which include our core banking system, our Enterprise Resource Planning (ERP) solutions, and our omni-channel. We are really doing this to enhance our customer experience so that people, when they walk into POSB, they get excited with our products. They can consume our products and we can create value together.”
Looking ahead, Changunda said the bank is aiming to pay out a significantly larger dividend in 2025, following a modest declaration in the previous year.
“To start with, in 2024, the shareholder would record that we declared a dividend of US$589,000,” he said. “We also, in this year, are planning to pay a dividend of $1.5bn.”
The capital raise, digital transformation agenda, and improved shareholder returns underscore POSB’s renewed focus on driving growth and impact in Zimbabwe’s financial services sector.
