NMBZ Holdings has secured $35 million from a regional bank and two European development finance institutions (DFIs) and is working towards securing a $10 million line of credit for the education sector, an executive said on Wednesday.
BY VICTORIA MTOMBA
Speaking at the company’s analyst briefing, chief executive officer Benefit Washaya said during the first half of this year the group secured $20 million line of credit from a regional bank which is being drawn down at the moment. He said the company managed to secure a syndicated $15 million line of credit from two European DFIs, which was now at legal documentation stage.
“Some of the credit lines will be targeted at small-to-medium enterprises. In this environment it’s only right to lend to someone who has something to lose. Security is not really an issue for us. Fortunately for us, we are talking to an institution that provides guarantee for small-to-medium enterprises where they are quite happy to provide 50% cover to SMEs,” he said.
Washaya said he could not provide more details on the institution as they were still finalising issues. He said when the company provides lines of credit they do serious due diligence.
“One of the loans is related to the shareholder and we are still finalising a number of issues,” he said. The $10 million is expected to be finalised next month, he said.
Washaya said FMO and Norfund, who jointly own 17,98% of NMBZ, have joined forces with Rabobank of Netherlands and pooled investments in financial services in 20 African countries into an investment vehicle called Arise.
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He said Banco Montepio, a Portuguese financial group, was expected to join the partnership in the near future.
“NMBZ will be able to benefit from a wide network of other African banks that are part of the partnership. The partnership will assist us in our quest for lines of credit to serve the smes and the financially excluded and marginalised groups,” he said.
Washaya said there are people who have been offering the bank huge amounts of money with a tenure of one year, but they have not taken them up. He said the group was considering lines of credit that are staggered and have quarterly payments.
Profit after tax declined by 17% at $2,6 million for the half year ended June 30,2016 compared to the same period in 2015.
Net interest income for the group was up 20% to $11,6 million for the period under review compared to $9,7 million in June last year.
Fees and commission income was down 37% to $7,58 million compared to $10,5 million in the comparable period in 2015. During the period under review the group’s investment properties increased by 10% due to property repossessions. Washaya said the interest caps and controlled transactional charges had an adverse effect on the bank’s performance.
