Harare, 7 February 2020 – TDB has issued a 3-year guarantee of ZWL 1 million – scalable to up to ZWL 6 million – to Untu Capital in favor of NMB Bank, blended with a technical assistance grant of ZWL 250,000, to enhance Untu’s lending capacity to SMEs in Zimbabwe.
The guarantee is the first of its kind to be extended under TDB’s SME Programme launched in 2018. The programme’s approach consists in leveraging TDB’s seed capital, blending it, and directing it through partner financial institutions, such as Untu Capital, who target SMEs – from micro enterprises to missing middle SMEs – as their client-base.
It is estimated that in Zimbabwe, SMEs contribute to more than half of the country’s GDP, employ over 75% of the workforce, make-up 70% of Zimbabwe Revenue Authority’s database of registered taxpayers, while only receiving less than 4% of loans from Zimbabwean banks.
The SME financing gap is valued in Sub-Saharan Africa at USD 331 billion, including 42 billion for women entrepreneurs. It is indeed mostly access to finance, alongside other challenges, which hinders MSMEs from flourishing and even surviving.
As commercial banks often find it challenging to understand and lend to MSMEs, there is a significant opportunity for institutions such as Untu Capital to provide the firepower these enterprises need, so as to enable them to become vectors of change and sustainable development in Zimbabwe.
“We appreciate the value of MSMEs in our economies and are thus delighted to extend this facility to Untu Capital in favor of NMB Bank, under our SME Programme” says Admassu Tadesse, TDB President and Chief Executive. “It complements our regular operations which, among other priorities, also target SMEs and mid-cap companies, namely via dedicated lines of credit with various partners around the globe”.
NMB Chief Executive Ben Washaya said the bank was delighted to play a crucial role in this transaction which resonates very well with its model of capacitating SMEs, which are the future of the Zimbabwean economy. “We are particularly pleased to be working with these key long- standing partners, TDB and Untu in supporting the SMEs sector. This guarantee facility enhances our lending capacity to this crucial sector and augments our current efforts to support SMEs”, he said.
Untu Capital’s Chief Executive Clive Msipha said, “the lender is excited at this opportunity to work with TDB and NMB in supporting SMEs in Zimbabwe. This facility recognises that there are internal resources that are available within the banking sector and aims to catalyst further lending to the SME sector. Untu has supported SMEs in Zimbabwe for the past 10 years and will use its knowledge of the sector in playing a crucial intermediation role in directing funding to SMEs”.
Established in 1985, the Eastern and Southern African Trade and Development Bank (TDB), formerly the PTA Bank, is a fast-growing multilateral, treaty-based, and investment-grade development finance institution, with assets of US$ 6 billion. The Bank’s mandate is to finance and foster trade, regional economic integration and sustainable development through trade finance and project & infrastructure finance.
About UNTU Capital
Untu Capital is a Microfinance Institution that is licensed by the Reserve Bank of Zimbabwe in terms of the Microfinance Act [Chapter 24:29]. The Company has been in operation since 2009 and focuses on providing financial solutions to Micro-Enterprises and SMEs.
About NMB Bank
NMBZ is a Zimbabwean based investment holding company whose principal subsidiary is NMB Bank Limited, a registered commercial bank in terms of the Banking Act Chapter 24:20. The Group has a dual listing on the Zimbabwean Stock Exchange and the London Stock Exchange.
Anne-Marie Iskandar, Senior Communications Officer
Corporate Affairs and Investor Relations
Trade and Development Bank