Iran has expressed interest to channel millions of dollars to Zimbabwean banks in lines of credit depending on the individual financial institution’s credit worthiness.
President of the Export Guarantee Fund of Iran (EGFI) Seyed Kamal Seyed Ali told businessdigest on Tuesday this week that his institution was willing to channel loans to local credit worthy banks at affordable interest rates.
“We are looking for some buyers here to sell our financing. We are going into cooperation with banks if we find some banks with credit worthiness and capacity to pay back our money,” said the EGFI president on the sidelines of the Global Micro Small to Medium Enterprises expo.
Ali said the institution can channel up to US$40 million directly to countries.
“Our interests rates are (London Interbank Offered Rate) Libor plus 2-3% interest per annum. It depends which bank is going to cooperate with us but we are going to give finance for the period between one and two years,” Ali added.
The EGFI president said CBZ Bank (CBZ) has been a beneficiary of their fund after receiving a US$15 million loan from the Export Development Bank of Iran five years ago.
“We gave US$15 million to CBZ five years ago. They have some outstanding amounts and they are going to reschedule it.
“So far they have paid two installments and in September they will pay another installment.If they (CBZ) pay back this will encourage the export development bank of Iran to give other loans to local banks,” he said.
Ali said Iranian companies were keen to invest in the country.
About 28 companies with expertise in banking and finance, science and technology from Iran participated at the Global Micro Small to Medium Enterprises Expo which kicked off on Tuesday this week.
Seychelles, India and Indonesian companies also graced the exhibition.
Zimbabwe’s Economic Planning and Investment Promotion minister Simon Khaya Moyo told delegates at the same event low business confidence, limited fiscal space and subdued international prices for major exports were responsible for massive job losses obtaining in the country.
Moyo urged Iranian companies to invest in the soon to be set special economic zones (SEZs) which are a new means to mobilise foreign investment.
China is assisting in the establishment of SEZs through technical support.
SMEs have become the source of livelihoods for the more than 85% of jobless people in Zimbabwe. The full potential of the sector is not realised due to limited access to finance and high costs of borrowing.