ZB Financial Holdings says it is in negotiations with a regional bank for a US$20 million line of credit facility.
This comes as the new government says it is prioritising international re-engagement after decades of diplomatic and business isolation.
By Melody Chikono
The funding is expected to boost exporters’ funding and enable the bank to support international transactions for tobacco and horticultural exporters.
ZB chief executive Ron Mutandagayi told businessdigest that the bank was targeting to reclaim the European Union as its customers export agricultural products.
This follows the removal of the bank from the United States-imposed sanctions in 2016, a move that paved way for relationships with foreign correspondent banks in Europe and financial institutions in other parts of the world.
“The same regional bank once assisted us with a US$15 million facility and we are very optimistic that we will get it. We used to export through our clients to the EU before.
“Since government has started making inroads on international re–engagement, we will take this opportunity to regain EU as our export market,” he said.
Mutandagayi said while the country has had high political risk over the past years, the new re-engagement would play a critical part in enabling access to credit lines needed by many local banks.
He added that the country has been experiencing loss of long-standing correspondent banking relationships or “de-risking” by leading global banks and was also beginning to pose significant risks to the country’s efforts to finance international trade and access to foreign lines of credit.
“There is need to strengthen re-engagement initiatives and processes with multi-lateral financial institutions and cooperating partners and minimise the continuation of de-risking, reduce country risk and improve financial relations,” he said.
In the past year, the group had been making inroads in mobilising lines of credit for funding of various operations.
The search for new lines of credit came as the group saw its deposits declining to US$259,83 million in the half year ended June 30 2017 down from US$275,27 million in the same period last year on account of a 17% strategic retreat in wholesale funding.
Meanwhile, Mutandagayi said the bank was this year going to focus on total digitalisation with the bank having recorded a 1 500% jump in volume of processed transactions since January 2017 to date driven by electronic RTGS transactions.
He added that the bank remained optimistic that digitalisation would enable the bank to invest in its capacitation.