BY MELODY CHIKONO NMB Bank has opened negotiations with potential funders for additional US$30 million worth of lines of credit to bankroll exporters’ growing appetite for loans.
The bank said it had in excess of US$50 million line of credit facilities.
Last week, NMB signed for a €12,5 million (US$13,4 million) facility with the European Investment Bank (EIB).
NMB chief executive officer Gerald Gore told NewsDay Business on the sidelines of the EIB signing ceremony that the fresh funds would flow by year end.
“We are looking at receiving between US$$20 million and US$30 million,” Gore said.
“We already have got funders who we are talking to. We wanted to first fully utilise this €12,5 million facility and when we are done we then move to the next. We are not trying to do anything else other than (fund) exporters because that is the only way you are guaranteed repayment of those lines. The timelines largely depend on… how quickly we exhaust this one (the EIB loan) but we are looking at before the end of the year for those other additional lines.”
Gore said funds loaned to exporters carried less risk because their repayment history was good.
In the past two years, there has been an uptick in loan uptake by exporters, Gore told NewsDay Business.
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This comes as local companies continue to battle access to foreign currency.
The foreign currency auction system, which offered hope to firms when it was introduced in 2020, has accumulated a huge backlog.
The NMB CEO said lines of credit had been performing well both in terms of uptake and repayment.
“With this line (of credit) we are not going to give local companies that are (producing for the domestic market). Our lines are targeting exporting companies because when it comes to repayment they have to (repay) in foreign currency. So naturally if you give it to someone who is selling locally they will struggle to pay back.Even this line will be strictly for exporters and we have put the necessary protection mechanisms that they get their receivables through NMB and when it comes to repayment they are then able to repay.On other lines, the repayment rates have been very good and I think the lines we had for the past two years all performed well. On some of them we got to a point where they were fully repaid and we then had renewals of the same facilities,” he said.
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