Zimbabwe: $180m lent to banks in deficit through Afreximbank facility
The facility enables banks with surplus liquidity to support those in deficit.The Reserve Bank of Zimbabwe (RBZ) has revealed that $180 million (€160 million) has been lent to banks through a $200 million inter-bank facility designed to support financial institutions in deficit.
The Afreximbank Trade Debt Backed Securities, underwritten by the Africa Export and Import Bank, enables banks with surplus liquidity to support those in deficit.
"This facility supported banks in an amount of $178.8 million as of 31 December 2015, for tenors of up to two years," said RBZ governor Dr John Mangudya in the 2016 Monetary Policy Statement seen by The Herald.
"This brought discipline in the financial market as no funds are granted without security," he added.
The African Export-Import Bank launched the facility in March 2014 in a bid to revive interbank lending and avoid a liquidity crisis.
"It is a well known fact that the Zimbabwean banking sector and more generally the economy are now facing serious liquidity problems," said the president of Afreximbank Jean-Louis Ekra during the launch.
"This situation makes it difficult for many companies to access funding at affordable costs, especially SMEs," he added, noting that the facility would help revive interbank lending.