Leading local financial institution CABS has signed a US$30 million financing facility with British International Investment (BII), the UK’s development finance institution to expand access to long-term funding for businesses in key economic sectors.
The facility is expected to support small and medium-sized enterprises (SMEs) particularly those operating in agriculture and food manufacturing through trade finance and capital expenditure loans.
CABS managing director Mehluli Mpofu said the funding would help businesses improve productivity, increase efficiency and create sustainable jobs.
He said the facility would also enable export-focused companies to replace outdated machinery, expand production capacity and strengthen their competitiveness in international markets.
Maria Smith, BII’s chief investment officer said Zimbabwe had significant entrepreneurial talent and growth potential but access to finance remained a major constraint to investment and productivity.
“Zimbabwe is the exact kind of market where we believe development finance can have the biggest development impact. Again, it’s a market with strong entrepreneurial talent and growth potential, but accessing finance continues to be a limit to investment and productivity,” she said.
Smith said the investment was part of BII’s newly launched Zimbabwe Agricultural Finance Programme.
Speaking at the signing ceremony, Reserve Bank of Zimbabwe governor John Mushayavanhu said the facility would support investment in agriculture, food processing, clean energy and sustainable production systems.
He said these sectors were important to Zimbabwe’s efforts to strengthen food and energy security, promote value addition and stimulate economic growth.
Mushayavanhu welcomed the facility’s four-year tenure saying it would allow businesses to access funding that better matched their investment cycles.
“This is particularly important, as productive investment requires financing that matches the investment cycle. Farmers, processors and manufacturers need time to acquire machinery, expand capacity, build supply chains and penetrate regional and international markets. Short-term funding cannot support long-term transformation.” he said
Ministry of Finance permanent secretary George Guvamatanga said the facility addressed a critical financing need among local businesses.
“The credit facility addresses one of the most critical requirements of our private sector, that is, access to affordable, long-term financing,” Guvamatanga said.
