The African Development Bank (AfDB) and NMB Bank Limited Zimbabwe (NMB) have inked a landmark deal worth US$15 million to bolster trade finance initiatives in Zimbabwe.
At a signing ceremony held at the NMB Bank headquarters in Harare, delegates from both institutions, including AfDB country manager Moono Mupotola and NMB Bank CEO Gerald Gore, hailed the partnership as a significant milestone for Zimbabwean businesses.
Mupotola lauded the collaboration as a pivotal step in supporting the growth and competitiveness of Zimbabwean enterprises. “By mitigating risk and facilitating access to trade finance, we are empowering SMEs and local corporates to participate more actively in regional and international trade,” she stated.
Gore underscored the significance of the deal in driving Zimbabwe’s economic development, noting that it would enable NMB to extend crucial trade finance support to a broader spectrum of Zimbabwean businesses. He highlighted its potential to unlock new trade opportunities, foster job creation, and spur economic growth.
The transaction guarantee provides NMB Bank with access to a maximum of US$15 million over a tenure of up to 36 months, aimed at unlocking significant trade finance opportunities for Zimbabwean SMEs and local corporates engaged in agri-business and trade distribution value chains.
Aligned with AfDB’s broader trade finance programme objectives, the facility focuses on supporting the vital role of SMEs in Africa’s economic development. Offering up to 100% coverage to confirming banks, it effectively mitigates non-payment risks associated with NMB Bank’s trade transactions, encouraging active engagement in trade finance activities.
The agreement accommodates various trade instruments, including confirmed letters of credit, trade loans to African banks, and irrevocable reimbursement undertakings. By reducing the necessity for cash collateral and offering up to 100% payment guarantee on transaction value, the arrangement presents an alternative risk management strategy, ensuring the security of trade transactions, particularly for SMEs.
Addressing the challenges SMEs face in accessing trade finance compared to their larger counterparts, this initiative fosters a more vibrant and inclusive business environment in Zimbabwe.
NMB Bank, a multi-award-winning registered commercial bank and subsidiary of NMBZ, boasts strong international and regional shareholders such as African Century, Arise, Old Mutual, and AfricInvest, positioning it as a key player in Zimbabwe’s financial landscape.
