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African Century on verge of setting up local bank

AFRICAN Century is on the verge of establishing a bank in Zimbabwe after receiving a licence from the Reserve Bank of Zimbabwe (RBZ), businessdigest has established.

Fidelity Mhlanga

Shareholders of African Century Ltd are African Century Leasing Ltd Mauritius and the Management Staff Share Scheme. African Century also has a significant equity stake in NMB Bank.

According to sources, the setting up of the bank is now at an advanced stage with the company creating branches among other key structures in the country.

“Yes we are at advanced stage we will be talking to you in the next two weeks. We want proper communication. We are busy setting up branches but there is a lot of work going on and we are in touch with the regulator (RBZ). We want to communicate formally in the next two weeks,” a close source said.

African Century in June secured a credit line of US$5 million from FMO (Netherlands Development Finance Company) for on lending to agricultural and small and medium enterprises. The firm was set up in 2010 as a leasing company in the local market after the country adopted the multi-currency regime in 2009. It has a lease book of US$25 million with over 800 leases granted since incorporation.

African Century has been operating as a deposit-taking microfinance institution after getting a licence from the Central Bank. Its subsidiary African Century Leasing (ACL) is a forerunner in equipment leasing providing asset finance to all key productive sectors of the economy.

The company has interests in mining, manufacturing, medical, transport and logistics and energy sector.
On November 26 2013 ACL received a certificate of recognition in the Financial Sector at the Zimbabwe Investment Authority Award ceremony held in Harare.

This year alone, the RBZ cancelled Allied bank and AfrAsia Bank licences after failing to meet the minimum capital requirement. However, the RBZ has initiated a cocktail of measures to strengthen the banking sector by introducing credit reference system, Zimbabwe Asset Management Company.

The banking sector’s aggregate ratio of NPLs to total loans improved from a peak of 20,45% in June 2014 to 14,52% as at June 30 2015.

The sector’s aggregate core capital base increased significantly by 19% from US$753,3 million reported as at June 30 2014 to US$899,10 million as at 30 June 2015.

Last year the RBZ proposed a three-tier system for banks in complying with the minimum capital threshold .
Banks in the Tier I strategic segment would be required to have minimum core capital requirements of US$100 million by 2020.

The Tier II segment comprises of commercial banks, merchant banks, building societies, development banks, finance houses and discount houses that will only conduct their core banking activities and should maintain minimum capital requirements of US$25 million.

Tier III segment should have minimum capital requirements of US$7,5 million by 2020 for Tier III.

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