FIRST Capital Bank (FCB) has secured a US$15 million trade finance facility from the African Development Bank (AfDB) for lending to small to medium enterprises (SMEs).
The facility will help bolster intra-African commerce in line with the goals of the Africa Continental Free Trade Area, AfDB said in a statement.
The package, comprising a US$7,5 million trade finance line of credit and a US$7,5 million transaction guarantee, is expected to catalyse about US$146 million in trade over the next three years, the pan African bank said.
“The line of credit will provide the much-needed hard currency financing to support FCB to close its trade finance gap and expand its trade finance support for SMEs and local corporates in Zimbabwe, a transition country.
“The transaction guarantee will provide a 100% guarantee to international confirming banks for the non-payment risk taken on FCB’s trade finance transactions conducted on behalf of SMEs and women-led businesses.”
The facility was approved by AfDB’s board of directors on April 30.
FCB chief executive officer Tapiwa Mushoriwa said they were excited about the growth prospects the US$15 million facility “will unlock for the business communities driving our economy”.
“The package aims to bolster our trade finance services in Zimbabwe, across Africa, and globally,” Mushoriwa said.
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Moono Mupotola, AfDB’s country manager for Zimbabwe, said the “facility is expected to support the importation of strategic commodities and promote the integration of Zimbabwe’s economy into regional and global trade markets, which are essential for the country’s growth”.
In its financial results for the year ended December 31, 2023, FCB said it was engaging AfDB and Trade Development Bank for credit lines for lending to sectors of the economy as the bank seeks to grow the interest income base.
FCB last year secured credit lines worth US$33,32 million from the European Investment Bank and Afreximbank.
