NMBZ secures $37m offshore credits

HARARE - Dual-listed financial services group NMB Zimbabwe Holdings (NMBZ) is set to secure $37 million in offshore credits earmarked for on-lending to industry and various sectors of the economy, a top company official has said.

Newly-appointed NMBZ chief executive Benefit Washaya told businessdaily in an interview yesterday that the Zimbabwe Stock Exchange and London Stock Exchange-listed group prioritises getting foreign lines of credit.

“The local industry requires appropriately priced funding of a fairly longer tenor and this type of money is not available locally,” he said adding that NMBZ started accessing lines of credit from as far back as 2010.

“As we speak, our approved lines stand at $56 million from six different funders, four of which are European development finance institutions (DFIs).

“We are expecting to draw down an additional $12 million in the next 30 days, the facilities have been approved and we are nearing the completion of the documentation execution stage to facilitate draw downs,” said Washaya.

This comes as three strategic foreign investors — Tunisia-based AfricInvest Capital Partners, Dutch Development Bank FMO and Norfund — injected $16 million into NMBZ in 2013 in exchange for a 26,97 percent stake.

In 2014, a French DFI Proparco also unveiled a $10 million facility to NMBZ for on-lending to the country’s small-to-medium enterprises (SMEs).

Market watchers say the stance by NMBZ to secure offshore credits would go a long way in addressing the liquidity crunch currently obtaining in the country.

The experts warn that macro-economic challenges such as liquidity crises tend to choke up productivity sectors of the economy.

Washaya, who targets to grow the financial services group by achieving tier one (1) status for NMB Bank through raising $100 million capital, says plans are underway to secure more lines of credit before the end of the year.

“We are also targeting an additional $25 million in lines of credit for the remainder of 2015 which could push our approved lines to a figure nearer $100 million,” he said.

In the full year to December 2014, NMBZ posted a $1,6 million net profit compared to a loss of $3,3 million reported in prior year, buoyed by cost cuts and a good loan book despite a slight decline in interest income.

In the period under review, the financial services group went on an aggressive campaign to keep its non-performing loans under check resulting in impairments dropping to $5 million from $16,6 million in 2013.

Interest income declined to $31 million from $33 million while interest expenses also dropped to $12,6 million from $13 million.

The group’s total deposits also surged to $235 million from $211 million and shareholders funds increased by four percent to $45 million.

No dividend was declared for the period.

 

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