The Infrastructure Development Bank of Zimbabwe (IDBZ) has partnered Norsad Capital- a private credit provider to create new opportunities for Zimbabwean businesses with potential for growth.
The development comes at a time business lobby groups, Zimbabwe National Chamber of Commerce (ZNCC) and Confederation of Zimbabwe Industries (CZI) have red-flagged the lack of patient US$ capital in the economy to support companies expansion following a devastating two years under COVID-19 pandemic.
The signed MoU sets out the terms of the partnership whereby both institutions will introduce each other to potential transactions and seek to collaborate and share risk.
“Our agreement means that we will introduce each other to potential transactions and seek to collaborate and share risk. We each have our own expertise and funding models, and together we can provide far more in-depth insights when putting together a deal,” said Kenny Nwosu, CEO of Norsad Capital.
“In addition to the various benefits, it will be helpful for us to have a partner on the ground in Zimbabwe who has local knowledge and can provide us with insights on businesses located in the country that we are considering doing business with.”
Both financial institutions focus on providing much-needed capital to businesses, which can be used to promote economic growth and improve livelihoods.
In terms of the agreement, the two parties will share contacts for potential business financing in Zimbabwe; assist each other when putting together sizable deals; and share investment opportunities of appropriate thresholds that meet the funding requirements of each party.
“We recognise that we share common objectives in terms of private sector development in Zimbabwe, and this is what drives our decision to collaborate with each other,” said Zondo Sakala, the CEO of the IDBZ.
From a regional perspective, the deal fits the Norsad Capital focus on the Southern African Development Community (SADC), where Zimbabwe is located.
Identifying itself as an impact investor aligned to the United Nations Sustainable Development Goals (SDGs), Norsad Capital has a thematic approach and selects investments that clearly contribute to solving social and environmental challenges.
Many of the sectors that are of importance to Norsad Capital are equally significant for the IDBZ, such as the transition to clean renewable energy and the pressing need for financial inclusion.
Norsad Capital, previously known as Norsad Finance, was first established in 1990. Norsad offers tailor-made debt solutions to profitable growth companies in Africa and has a goal to impact 100 million lives over the next decade in line with its strategy to scale and deepen its impact in Africa.