HomeNewsFirst four ZETREF intermediaries unveiled

First four ZETREF intermediaries unveiled

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The Ministry of Finance has selected four commercial banks to administer the first tranche of the Zimbabwe Economic and Trade revival Facility (ZETREF), a $100 million purse created by government and the Africa Export-Import Bank (Afreximbank).

The two parties launched the facility in August with an initial seed fund of $70 million, which will be disbursed through designated commercial banks in two tranches.

The money will be lent out to the private sector at concessionary rates, to address liquidity problems and induce debt market correction in terms of lending rates and loan tenor.

Afreximbank has contributed $50 million with government committing $20 million from its International Monetary Fund special drawing rights.

The approved intermediaries for the first tranche are TN Bank, FBC Banking Corporation, NMB Bank and BancABC which will administer an initial pool of funds valued at $25 million.

All the banking institutions will on-lend $5 million each except FBC, which will have $10 million more on its off-balance sheet loan book.

Acting Ministry of Finance permanent secretary Mutasa Dzinotizei on Friday said the four were selected from a pool of banks that expressed interest, after a due diligence.

He added the first tranche of $25 million is meant for capital spending.

“The $25 million allocated to the four banks is for both acquisition of equipment, capital goods and working capital,” Dzinotizei said.

“These banks will now sign Facility Agreements with Afreximbank and the Ministry of Finance, the co-lenders, after which the banks can start processing applications from prospective clients.”

Dzinotizei said Afreximbank would soon commence a due diligence on more players to shortlist those that would administer a second tranche of $45 million.

He added companies would go through the conventional process of loan application and assessment to gain access to the funds.

Launching the facility, Finance minister Tendai Biti said the low-cost loans would enable the private sector to increase capacity utilisation above 40% around which most industries have plateaued.

The country’s head of Treasury, however, admitted government has found it difficult to attract substantial lines of credit as a result of the country’s creditworthiness, which deteriorated adversely over the decade of economic downturn.

For the whole of last year, lines of credit amounted to $656 million, about a third of industry’s recovery short-term requirements.

The government-secured facilities slowed to $200 million in the first half of the year.

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