European Investment Bank credit facility demonstrates confidence in local banks – Government

By Alois Vinga

The GOVERNMENT welcomed the €12.5 million European Investment Bank (EIB) credit facility extended to Zimbabwe through First Capital Bank (FCB), saying that this development indicates growing confidence in local banks in the country.

First Capital Bank Limited, in partnership with the EIB and the European Union, on Tuesday secured a development line to locally develop qualifying investment projects undertaken by small and medium-sized enterprises (SMEs) and mid-cap companies under First Capital Bank Limited.

This line of credit is part of the Zimbabwe Private Sector Facility of the Investment Facility (IF) impact financing envelope, which is provided by the European Investment Bank to a group of financial institutions located in Zimbabwe.

Addressing delegates at the EIB’s official signing ceremony, Finance Ministry Permanent Secretary George Guvamatanga said the collaboration confirms growing confidence in local banks.

“The fact that the EIB is expanding its presence demonstrates its confidence in the capabilities of our local banks.

“We are encouraged by this and look forward to more opportunities that can be offered to local businesses. It is up to us to show our expertise and put in place strong frameworks to ensure that the maximum impact is achieved through these efforts,” he said.

He said the facility will provide a new channel of access to much-needed long-term financing, cost-effective loans and working capital relief that will allow our businesses to focus more on growth and develop sustainable ways. to exploit the opportunities still available in our economy.

“We expect this intervention, among others, to have a positive direct impact on the productive sector which should translate into sustainable import substitution and export stimulation, both of which should have a positive influence on the trade balance. of the country,” Guvamatanga said.

The remarks come at a time when the Reserve Bank of Zimbabwe (RBZ) has since 2019 put in place a series of measures aimed at restoring confidence in the banking sector.

As a result, foreign currency deposits grew along with international remittances thanks to unlimited access to deposits by the banking public.

Also speaking on the occasion, Head of EIB Regional Representation for Southern Africa and Indian Ocean, Jim Hodges, said the Western financier is committed to supporting the corporate sector from the country.

“The EIB is committed to ensuring that Zimbabwean entrepreneurs and businesses can invest through new cooperation with local financial partners.

“As part of Team Europe, the EIB is pleased to provide EUR 12.5m of targeted financing to First Capital Bank Limited to accelerate private sector investment, create jobs and accelerate Zimbabwe’s post-pandemic recovery” , did he declare.