AfDB partners with NMB to boost trade finance.

THE African Development Bank (AfDB) and NMB Bank Limited Zimbabwe (NMB) have signed an agreement,  that will pave way for a US$ 15 million trade finance transaction guarantee Facility for NMB.

This strategic collaboration aims to unlock significant trade finance opportunities for Zimbabwean businesses, particularly benefiting small and medium-sized enterprises (SMEs) and local corporates engaged in agri-business and trade distribution value chains.

The Transaction Guarantee is an uncommitted trade finance facility granting NMB Bank access to a maximum of fifteen million United States dollars, with a tenure of up to 36 months.

Delegates from both institutions graced the signing ceremony, held at NMB Bank Headquarters. Among them were Ms. Moono Mupotola, AfDB Country Manager, and Gerald Gore, NMB Bank chief executive officer.

The Transaction Guarantee is an uncommitted trade finance facility granting NMB Bank access to a maximum of fifteen million United States dollars, with a tenure of up to 36 months. It offers up to 100% coverage to confirming Banks, effectively mitigating non-payment risks linked to NMB Bank’s trade transactions on a per-transaction basis. Tailored to support intra-Africa trade and trade between Africa and the rest of the world, this facility serves as a versatile and responsive financial solution. Its existence significantly diminishes the risk for international financial institutions, encouraging them to actively engage in trade finance activities with Zimbabwean businesses.

The facility accommodates various trade instruments, including confirmed letters of credit, trade loans to African Banks, irrevocable reimbursement Undertakings (IRU), availed bills, and promissory notes. By reducing the necessity for cash collateral and offering up to 100% payment guarantee on the transaction value, it presents an alternative risk management strategy, ensuring the security of trade transactions.

Moono Mupotola, AfDB Country Manager, expressed enthusiasm about the innovative partnership, stating, “This is a significant step forward in supporting the growth and competitiveness of Zimbabwean businesses. By mitigating risk and facilitating access to trade finance, we are empowering SMEs and local corporates to participate more actively in regional and international trade.”

Gerald Gore, NMB Bank CEO, echoed these sentiments, emphasizing the agreement’s importance for Zimbabwe’s economic development. He stated, “This facility will be instrumental in enabling NMB to provide crucial trade finance support to a wider range of Zimbabwean businesses. This will not only unlock new trade opportunities but also contribute to job creation and economic growth.”

This agreement aligns perfectly with AfDB’s broader trade finance program objectives, with a specific focus on supporting the vital role of SMEs in Africa’s economic development. SMEs often face challenges in accessing trade finance compared to their larger counterparts. This initiative directly addresses this gap, fostering a more vibrant and inclusive business environment in Zimbabwe.

NMB Bank Limited is a multi-award-winning registered commercial bank and the principal subsidiary of NMBZ, a Zimbabwean-based investment holding company listed on the Zimbabwe Stock Exchange. The bank has among its top shareholders strong international and regional entities such as African Century, Arise, Old Mutual, and AfricInvest who all have a very strong African footprint.

NMB Bank is a registered member of the Deposit Protection Scheme.