THE Norwegian Investment Fund for Developing Countries (Norfund) has extended a $1,4 million loan facility to NMBZ Holdings Limited for on-lending to small and medium enterprises in Zimbabwe.
Report by Victoria Mtomba
Speaking at the signing ceremony yesterday, Norfund investment director (head of department financial institutions) Deepak Malik said Africa was the investment fund’s number one investment destination.
“We started looking at this bank sometime in February 2012.It is the first investment that we are making in Zimbabwe,” he said.
“We have been evaluating the bank over the past few months.
“For us it’s a big investment. We trust that our money will be used correctly and we are investing $1,4 million.”
Malik said the investment would open the bank to attract more capital and would help the bank grow from strength to strength.
NMBZ group chief executive James Mushore said the bank had been looking for capital in the market and it was not a case of looking for a shareholder but a shareholder with a profile to provide lines of credit.
“The $1,4 million was for SMEs and it is a seven year loan. The new shareholders will own 8,6% stake in the bank,” he said.
Speaking at the same occasion, Norwegian ambassador Ingejorg Stofring said the signing of the agreement between NMBZ and Norfund was supported by the Norwegian government as a way of promoting economic growth and employment opportunities.
“SMEs are frequently too large to qualify for microfinance and microfinance loan sizes are too small to meet SME capital needs. At the same time, SMEs are often considered by commercial banks and financial institutions to be risky and costly to serve. Norfund’s mandate is to seek to close this gap in the market and their investment in NMB Bank is an important part of this strategy,” Stofring said.
“We fully anticipate that the need for aid will — not in a too distant future — fall away as Zimbabwe is well-endowed with minerals, agricultural land and immense human capital.
“We fully expect the agriculture, mining and commercial sectors to recover creating a new prosperity for all Zimbabweans.”
She said Norfund was a State-owned institution that was established in 1997 to invest in developing countries that required considerable injections of capital.
NMBZ raised $14,3 million through a private placement early this year with Norfund having contributed close to $5 million.