The African Development Bank Group (AfDB) has given the green light to a $15 million trade finance package for First Capital Bank (FCB) in Zimbabwe, signaling a significant move toward bolstering intra-African commerce in line with the Africa Continental Free Trade Area (AfCFTA) objectives.
This financing package comprises a $7.5 million trade finance line of credit coupled with a $7.5 million transaction guarantee, aimed at catalyzing approximately $146 million in trade over the next three years.
The initiative holds promise for injecting a much-needed boost into the Zimbabwean economy, especially in supporting small and medium-sized enterprises (SMEs) and local corporates. The trade finance line of credit is poised to provide vital hard currency financing, addressing the trade finance gap and facilitating the expansion of FCB’s trade finance services.
Additionally, the transaction guarantee component offers a 100% guarantee to international confirming banks for the non-payment risk associated with FCB’s trade finance transactions, particularly those involving SMEs and women-led businesses.
Tapera Mushoriwa, CEO of FCB, expressed enthusiasm about the growth opportunities unlocked by this $15 million facility for Zimbabwe’s business community. The package strategically enhances FCB’s trade finance capabilities both domestically and internationally, positioning the bank as a pivotal player in facilitating trade within Zimbabwe, across Africa, and globally.
Moono Mupotola, African Development Bank Zimbabwe Country Manager, stressed the strategic importance of the facility in supporting the importation of strategic commodities and fostering the integration of Zimbabwe’s economy into regional and global trade markets. Such integration is crucial for the country’s economic advancement, highlighting AfDB’s commitment to sustainable development across the continent.
The approval of this trade finance package underscores AfDB’s commitment to promoting inclusive and sustainable economic growth in Zimbabwe and beyond, aligning with the broader objectives of AfCFTA to foster intra-African trade and economic integration.
