The African Development Bank (AfDB) has approved a US$15 million trade finance transaction guarantee facility for NMB Bank, the bank announced on Wednesday.
This marks AfDB’s first line of credit to NMB, a registered commercial bank renowned for its unwavering support for small and medium-sized enterprises (SMEs).
This facility will provide 100 percent guarantee to international confirming banks (CBs) for the non-payment risk they take on NMBZ’s trade finance transactions conducted on behalf SMEs and local corporates active in agri-business and distribution value chains in Zimbabwe.
According to the AfDB, the facility is projected to support more than US$100 million in total trade volumes by 2026 and by extension reduce the continent’s trade finance gap. It will also increase access to finance and support intra-Africa trade between Zimbabwe, SADC, and the rest of Africa.
AfDB country manager Moono Mupotola noted that SMEs and other domestic firms have a harder time accessing trade finance than multinational corporates and large local corporates. “This transaction guarantee facility is therefore a timely and strategic tool that will enhance correspondent banking relationships for NMB and, in the process, help reduce Zimbabwe’s trade finance gap,” she said.
Lamin Drammeh, head of trade finance at the AfDB, emphasised that this trade intervention aligns directly with the bank’s broader mission to support small businesses, women entrepreneurs, farmers, and local corporations across the continent. This will be achieved by integrating them into key regional and global value chains.
“This trade intervention speaks to the AfDB’s trade finance program objectives to support SMEs, women-owned businesses, farmers, and local enterprises/local corporates on the continent by connecting them into key value chains regionally and globally,” said Drammeh.
According to World Economics, SME’s and the informal economy account for 61 percent of the gross domestic product.
The International Labour Organisation estimates that the sector employs about 5,2 million or 34 percent of the population.
Herald
