Proparco renews partnership with NMB to expand financing for exporters, agricultural SMEs and women in Zimbabwe
published on 05 November 2024
In Harare, Zimbabwe's capital, Proparco has committed to three facilities with NMB Bank Limited, cementing its partnership with the bank. The facility package includes a USD 15 million credit facility, a USD 5 million EURIZ portfolio guarantee, and a USD 5 million trade finance guarantee, targeting SMEs, the agriculture sector, women entrepreneurs, and local importing and exporting businesses.
Proparco has just signed a USD 15 million senior credit facility to NMB Bank Limited (NMB), a Zimbabwean commercial bank. This financing will be dedicated to SME exporters in the agri-food sector, and is qualifying for the 2X Challenge, the initiative led by many development finance institutions and multilateral development banks to strengthen the economic role of women in the countries in which they are active. The credit facility benefits from the support of the European Union through its EFSD+ MSME Plus Platform guarantee programme, designed to boost the access to finance of SMEs operating in the agriculture sector.
In addition, Proparco has approved a USD 5 million EURIZ portfolio guarantee and a USD 5 million Trade Finance Guarantee to NMB. The EURIZ guarantee, which also benefits from EU support, will share the risk associated with financing small and medium-sized enterprises (SMEs) operating in Zimbabwe, with a particular focus on the agriculture sector and women-owned businesses. The trade finance guarantee will strengthen NMB’s capacity to support local businesses that import essential goods, including food items and agricultural inputs.
Zimbabwean banks face many challenges when it comes to supporting the real economy, including a lack of access to medium- and long-term USD-denominated finance, risk constraints pertaining to certain high-impact sectors and segments, as well as difficulties accessing confirming lines required for trade finance activities. Proparco’s innovative and comprehensive intervention simultaneously addresses these various challenges through a combination of liquidity support and risk-sharing mechanisms. This coordinated approach enables NMB to reach a wider range of customers and expand its business operations holistically.
The NMB/Proparco partnership was celebrated at a signing ceremony, which took place in Harare on the 30th of October, 2024. In addition to senior representatives from NMB and Proparco, the ceremony was attended by the French Ambassador to Zimbabwe, the EU Ambassador to Zimbabwe, as well as the Governor of the Reserve Bank of Zimbabwe.
Gerald Gore, NMBZ Holdings CEO said “Our partnership with Proparco has stood the test of time. This facility reaffirms our shared focus on growth, sustainability, and overall contribution to the development of the Zimbabwean economy. The facility provides the much-needed support to our exporting entities to retool and for working capital support in order to compete effectively on the global arena. The facility comes at a time NMB Bank has been working on growing its agribusiness sector and a specific focus to support women run businesses, the youth and businesses that enhance social services”.
Steven Gardon, Regional Director for Southern Africa at Proparco, said “We are very pleased to be working once again with NMB, a Proparco client since 2014, in supporting a range of high-impact sectors and segments in Zimbabwe. This facility is fully in line with our strategic priority of investing in a sustainable and resilient economy. We are also very proud of NMB's focus on strengthening the economic role of women”.
The project will contribute to achieving the following Sustainable Development Goals (SDGs): SDG 5 (gender equality), SDG 8 (decent work and economic growth), and SDG 10 (Reduced Inequalities).
