Zimbabwe: MBCA Bank secures $20m line of credit to enhance businesses' productivity
The loans will fund their capital expenditure.MBCA Bank, a unit of South Africa's Nedbank, has concluded a $20 million (€17.9 million) line of credit with Afreximbank to support businesses' capital expenditure and enhance their productivity.
MBCA Bank managing director Charity Jinya said funding under the deal would cater for clients keen to purchase or upgrade machinery, retool manufacturing operations and fund expansion programs in all the key sectors of the economy such as agriculture, mining, construction and the health sectors.
"At MBCA Bank, we understand that an economy can only perform well with state of the art equipment and healthy workers, hence the specific inclusion of the health sector in our funding programs. Drawings under the facility may be in the form of direct advances, that is, loans and or letters of credit in line with client requirements," she explained.
This line of credit comes at the right time for Zimbabwean businesses, who've been struggling to access credit because of troubles in the banking sector.
According to the 2014 African Economic Outlook report, Zimbabwe's financial sector continues to experience structural vulnerabilities arising from the lack of confidence by depositors, liquidity constraints, rising non-performing and insider loans, high lending rates and low deposit rates, the absence of an active inter-bank market and the lack of an effective lender of last resort.