Arab Bank execs jet in

HARARE - Arab Bank for Economic Development in Africa (Badea)’s executives are in Zimbabwe to review performance of a $5 million loan facility granted to government through CBZ Bank Limited (CBZ).

A senior CBZ official yesterday confirmed the development, adding they had “so far disbursed just under a million dollars” of the funds — targeted at bailing out small to medium enterprises (SMEs).

“It is concessionary funding,” he said, adding the facility was approved last year.

In February 2011, Badea — created to strengthen economic, financial and technical cooperation between Arab and African countries — signed an agreement for the $5 million loan with government, represented by Zimbabwe’s ambassador to Sudan, Hilda Suka-Mafudze.

The facility will provide additional capital resources to support SMEs mainly in the sectors of industry, agriculture, micro-credit and services.

“The project will also increase production and employment opportunities in line with government’s...strategy to combat poverty,” Badea said.

The loan will be repaid in 15 years, including a four-year grace period, at an annual interest rate of 2,5 percent.

Badea said its total commitments for Zimbabwe stood at $130,3 million utilised for funding 12 projects, two lines of credit, seven technical assistance operations and two trade finance operations.

This comes as last December, CBZ secured a $120 million credit facility from a top European bank.

The funds, expected to relieve the country of a biting liquidity crunch, were obtained in collaboration with partners, including Sakunda Holdings (Private) Limited (Sakunda).

Under the agreement, CBZ and company used their respective balance sheets, and connections to raise the cash.

In addition to a $100 million financing facility from the African Export and Import Bank announced in October, CBZ has been at the forefront of other fundraising initiatives for the key extractive sector through the Agricultural Marketing Authority bills.

The institution has sunk well over $180 million into this sector, its current results say.

In manufacturing, the financial giant has laid out $100 million-plus.

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