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Minister Patrick Chinamasa

Oliver Kazunga Senior Business Reporter
AFRICAN Century Limited (ACL) has secured $5 million credit facility from FMO, a Dutch Development Bank for on-lending to Small and Medium Enterprises (SMEs).

ACL is a stand-alone leasing company providing a wide range of leasing products to key sectors of the economy and finance assets that include agricultural equipment like tractors, trailers, implements and centre pivots; manufacturing and mining equipment; passenger motor vehicles and haulage trucks.

The tenor of the leases ranges from one to three years with monthly payments.

Finance and Economic Development Minister Patrick Chinamasa said on Monday that the government welcomes international support on emerging economies through long-term funding.

“My ministry values international funders like FMO a Dutch Development Bank, who have an interest in creating sustainable economic impact in emerging markets through provision of long term finance.

“I’ve also been emphasising the need for long term finance in order to retool the various sectors of our economy. To underscore the point, I decided that I attend as witness to today’s signing ceremony for African Century’s new credit line from FMO of $5 million, which will be used for on-lending in the form of financial leases to SMEs,” he said in a speech during the signing ceremony.

The minister said the development fits well within the government’s strategy of creating access to finance for SMEs.

He said SMEs continue to highlight inadequate funding as the major constraint to their growth.

“Their economic significance in terms of employment and contribution to our country’s Gross Domestic Product (GDP) can’t be over emphasised.

“According to Business Research Volume 3 of November 4, 2013, SMEs in Zimbabwe contribute significantly to GDP and are responsible for the livelihoods of about 80 percent of the population,” said Minister Chinamasa.

He said Zimbabwe’s productive sectors have a huge need for long-term finance, which could unlock the huge potential in local businesses. Minister Chinamasa expressed hope that the economy would continue to benefit from access to long term finance provided by financiers such as FMO and other development finance institutions.

He said the government would continue to put in place measures to ensure protection of investors and providing a friendly environment for doing business.

In addition, he said his ministry has urged local banks and other financial institutions to raise external credit at competitive rates to support economic growth.

“Businesses, particularly SMEs, need to have access to credit from a diverse range of sources at competitive interest rates,” he said.