STANDARD Chartered Bank, Stanbic and CBZ have been appointed bankers for the Zimbabwe Portfolio Fund which was established by the Reserve Bank of Zimbabwe in August this year, businessdigest has learnt.
By Melody Chikono
Although the fund was supposed to be functional from September this year, the bankers are still awaiting the seed capital from the central bank.
Standard Chartered Bank CE Ralph Watungwa told businessdigest on the sidelines of the 46th Institute of Bankers Summer School (IOBZ) in Nyanga last week that the seed capital is going to be approximately US$1 million for each of the banks, adding that there is potential in private equity in Zimbabwe.
“There is potential in Zimbabwe concerning private equity. I think that the good thing is that there is an equity fund that was created recently in the last monetary policy statement and CBZ, Stanbic and Stanchart have been made the bankers for the fund. We are just waiting for the seed capital to come in ,” he said.
“That way when the investor comes into Zimbabwe we sort of reserve the currency that will pay for the capital, investment appreciation and dividend.
“It is going to be potentially a million US dollars for each of the banks and then as and when investors come in with fresh capital, it will be ring-fenced.”
Upon introducing the fund, the central bank said that it has noticed that repatriation of foreign exchange for securities-related transactions is taking a long time to be processed by banks despite such transactions being in the first category of the priority list for the allocation of foreign exchange.
The Zimbabwe Portfolio Investment Fund has therefore been put in place to address this challenge by facilitating the efficient repatriation of portfolio-related funds to foreign investors specifically on the Zimbabwe Stock Exchange (ZSE).
Watungwa said the confidence level of a country drives investment inflows, adding that investors needed a guarantee that they will get their money back.
He said the fund will go a long way in restoring investor confidence in the country and the three banks will be responsible for ensuring that the fund becomes self-running by being able to pay out for those who want to pay out .
“We will benefit through custody business, the inflows that will come in the usual banking business… For the country it gives confidence that they will come in and they will tell people that it’s not true that if you invest in Zimbabwe your money will not come back,” he explained.
“The seed capital is coming from the Reserve Bank. We will then mobilise the money that comes through the banks that goes to the stock exchange. We will be responsible for quarantining the capex so that for people that want to pay out we can use that same fund so it becomes a self-running fund.”
Meanwhile, Watungwa said his bank is on course in every aspect of its operations and is confident that the financial institutions’ year-end results will be reflective of this.
“We have gone digital as you know we have stopped any paper-based RTGS. We think we will come out of the year with a financial performance indicative of the successes that we had,” he said.