The Trade & Development Bank (TDB) has issued a three-year guarantee on Unthu Capital loans worth ZWL$1m it will get from NMB Bank for on-lending to the small and medium enterprises (SMEs).
The guarantee can be scaled up to ZWL$6m. TDB has also given Untu a technical assistance grant of ZWL$250,000. Untu’s own contribution will be ZWL$62 500 with the remainder coming from TDB.
Speaking at the signing ceremony of the guarantee facility in Harare Friday, Untu Capital CEO Clive Msipha said SMEs remain a credible source of employment in Zimbabwe and are the source of future corporates in Zimbabwe and in Africa.
It is estimated that in Zimbabwe, SMEs contribute more than half of the country’s GDP, employ over 75% of the workforce and make-up 70% of Zimbabwe Revenue Authority’s database of registered taxpayers. Unthu, however, receive less than 4% of loans from Zimbabwean banks.
NMB CEO Benefit Washaya said: “The SME sector is risky. Many international players view Zimbabwe as a risky country. We will always remain indebted to you. We don’t take that support lightly. We believe you have chosen the right partner and you will not regret the decision.”
“I hope that when you make a success from this transaction, you will be able to go deeper into the market and come up with more transactions.”
Gloria Mamba, TDB’s Coverage Executive Anglophone Southern Africa and Asset Management, said a technical grant was also in place to strengthen Untu to make the institution “bigger and stronger to increase its reach”.
The guarantee is the first of its kind to be extended under TDB’s SME Programme launched in 2018. The programme’s approach consists of leveraging TDB’s seed capital, blending it, and directing it through partner financial institutions that target SMEs – from micro-enterprises to missing middle SMEs – as their client-base.
The SME programme will run in six African countries—Zimbabwe, Burundi, Ethiopia, Kenya, Malawi and Zambia.