ZB Financial Holdings (ZBFH) is in talks with a regional bank for a $30 million line of credit, which will enable ZB Bank, its commercial banking subsidiary, to support international transactions.
BY MTHANDAZO NYONI
The bank has also raised more than $80 million towards the second phase of a $1 billion Emergency Road Rehabilitation Fund.
ZBFH chief executive officer Ron Mutandagayi confirmed these developments in an interview with NewsDay.
“Currently, we are chasing $30 million; $10 million is almost at a drawdown stage; $20 million, we are finalising the paperwork with a regional financial institution,” he said.
“I think after the post-election period, we are now engaging our correspondent banks for higher lines of credit and we think that we will be able to bring in a lot of foreign currency through credit lines in the foreseeable future.”
Government’s re-engagement programme is expected to restore diplomatic relations strained by the previous administration and help to reduce country risk often blamed for scuttling business deals.
Mutandagayi said the funding would boost ZB Bank’s exporters’ funding and enable the bank to support international transactions for various products such as horticultural exports.
The establishment of the Credit Reference Bureau has helped improve risk management practices as well as bringing down non-performing loans as borrowers now serviced their loans on time.
“As I said, the credit culture in Zimbabwe is increasing. One of the advantages of the Credit Reference Bureau is that it improves banks’ risk management practices and loan underwriting practices, because we are able to track a person’s credit history and that assists us in assessing those that qualify for loans,” Mutandagayi said.
“So I must commend the RBZ for the Credit Reference Bureau. It has assisted greatly in that and also in reducing non-performing loans.”
He added that ZB Bank’s balance sheet, in terms of loans, currently stood at just above $120 million.
“You will obviously remember that we are coming from a period of very high non-performing loans. What we have had to do to deal with that problem is obviously to revise our risk management processes. We are quite happy now that they are working quite well,” he said.
“As a local financial institution, the most important thing for us is to participate in all areas of economic growth. We fund farmers, we do accept the 99-year leases by the way; we fund mortgages; we do motor vehicles financing and we also do personal loans. So we cover the whole gamut of financial services.”
Mutandagayi said the bank targeted raising $150 million under the second phase of the Emergency Road Rehabilitation Fund from $105 million last year.
“That programme is expected to morph into a $1 billion transport rehabilitation programme, and we think we will still continue to assist government in those areas,” he said.