PROPARCO, a French Development Finance Institution yesterday signed a five-year loan agreement of US$10 million with Zimbabwe Stock Exchange listed financial company NMB, cementing France’s growing investment interest in the country. Speaking at the signing ceremony, French Ambassador Laurent Delahousse said the transaction was testimony to France’s commitment towards doing business with Harare despite the European Union sanctions imposed on Zimbabwe. He said in spite of the EU sanctions due for review next week, France was interested in doing business in the country and had put “its money where its mouth is”.
Foreign Affairs Deputy Minister Ambassador Chris Mutsvangwa said since last year French companies have invested over US$60 million in the country “and this shows how eager the French are in terms of re-engaging. We hope to see companies from France coming to invest in the country.”
Other recent French investments in the country include the sale of a majority stake in Redan Petroleum to Trafigura. Trafigura is also planning another massive investment in the energy sector. At the same time a French bank, Société Générale, recently extended a US$120 million line of credit through CBZ bank for agricultural inputs.
After three years of negotiations, the US$10 million puts the bank’s total amount of loans received from European development finance institutions to slightly above US$20 million, NMB chief executive Mr James Mushore said at the signing ceremony. The money will be channelled towards funding different sectors of industry.
“This will open more doors for us and assist us on our journey into a tier one bank. Currently we have short-term and expensive money and this will allow us to fund business long-term. At the core of our business is development and sustainability so when we lend money we want to do it,” Mr Mushore said in his speech.
Last week, Mr Mushore said the bank has and continues to access additional lines of credit especially from international development financial institutions on the back of the strong balance sheet and shareholder profile.
“We currently have approved lines of credit amounting to US$57 million.”
The US$10 million brings the amount to US$67 million.
Mr Christophe Blanchot, regional representative of PROPARCO for southern Africa said the loan will allow NMB to finance the expansion of its credit portfolio in a market where funding is only available on a short term basis.
He said NMB had a strong brand which helped it to attract renowned shareholders such as AfricInvest and DFIs FMO and Norfund.
“This loan is a sign of trust in the country and in the bank itself. We are yet to overcome some reluctance internally but we have been convinced. Something we also expect is that this money, coming from a development bank will have a catalyst effect over investors particularly on French ones,” he said.