Financial services provider, Old Mutual Zimbabwe Limited has announced finalization of a € 15 million facility with the European Investment Bank (EIB) meant to support productive sectors of the economy.
Announcing the company’s 2021 First Half to June performance, Group chief executive Samuel Matsekete said the company was expecting to tap into the huge appetite for hard currency borrowing in the local market.
“We finalized agreements with the European Investment Bank (EIB) for a €15 million facility that will be used to extend foreign currency lending to productive sectors of the economy,” said Matsekete.
The development is expected to be a huge boost to local productive sectors that have been struggling to access foreign currency for retooling.
Reserve Bank of Zimbabwe (RBZ) governor Dr John Mangudya recently said there was currently about US$ 1.7 billion lying idle in foreign currency accounts earmarked for lending to productive sectors but local banks were hesitant to lend citing concerns over local firms’ ability to repay loans in foreign currency.
Meanwhile, the Group is confident of the market performance following a positive growth spurred by increased demand for foreign currency denominated loans.
“Loans and advances grew by 90 percent from prior year same period at the back of increased hard currency lending with cash balances used to fund loan book growth,” said Matsekete.
The Group posted an inflation adjusted profit before tax of $11, 2 billion an increase from $8, 9 billion achieved in the same period last year.
Inflation adjusted total assets increased by 23 percent from $114,6 billion as at December 31 2020 to $141,3 billion as at 30 June 2021 with nominal growth of 51 percent higher than inflation of the year to 30 June 2021 of 20,69 percent.
Life and general insurance businesses’ net earned premiums (NEP) registered a growth of 517 percent, achieving NEP of $3, 3 billion for the period to June 30, 2021 up from $534, 4 million in 2020.