Banking group, CBZ Holdings has advanced to date $100 million to small and medium enterprises (SMEs) over the past five years and is in the market for additional funds amounting to $20 million to expand its SMEs loan book.
SMEs are contributing an estimated 50 percent of the country’s Gross Domestic Product, with Finance Minister Patrick Chinamasa describing them in his 2015 National Budget as the “new economy”. The sector become important to the Zimbabwean economy through providing employment in the wake of closure of formal companies.
Division Director for Business Banking Molly Dingani told journalists during a tour of some of its financed SME’s that the group has in the past five years disbursed $100 million to SME’s, nurturing some businesses that have since transformed into large companies.
“We are looking at an additional $20 million by end of 2016 to the current loan book of $100 mln and our aim is to reach out to the financially excluded both in urban and rural areas,” she said.
Dingani said non-performing loans ratio for the SME book is currently at 5% and the annual interest on the loans averages below 15% as prescribed by the Reserve Bank of Zimbabwe.
She said the Business Banking division launched as a separate unit in January 2015 has to date rolled out Business Banking Centres in Harare, Bulawayo, Masvingo and Mutare.
“Besides provision of financial services that detail business approach in the simplest terms, CBZ Banking also offers clients training, advisory services as well as market linkages,” she said.
Head Small to Medium Enterprises Lawrence Chidembo said the Group has under the $100 million loan book supported over 5 000 SMEs whose financial requirements ranges from $10 000 to $50 000 for SMEs while at $200 000 for Micro SMEs.
Chidembo said financial support is also extended to informalised SME’s who have proper business proposals. “We do not extend financial support on cash basis, but pay for the transactions that would have been invoiced,” he said.
According to Dingani, some of the Business Banking division success stories include Nash Paints and Joanne Investments.
Nash Paints CEO Tinashe Mutarisi said the Business Banking division recently extended a $900 000 mortgage that the company used to acquire new premises and a plant. The mortgage has a 12% annual interest and CBZ has over the years provided financing loans in excess of $100 000.
Production manager Evans Masvaike said total investment on the business expansion is just below $2 mln.He said the company has grown from a single branch in 2006 to 19, spread across the country.
Joanne Investments is into the chicken business, boasting of an abattoir, 3 000 contract farmers and supplies 63 shops and butcheries countrywide.