Senior Business Reporter
FINANCIAL services group, NMB Zimbabwe has said as the economy continues to show signs of resilience and recovery, it will continue to fund and support the productive sectors of the economy.
Late last year, the bank said it will raise up to $2 billion through a private placement of a 12-month Agro Bill for onward lending to farmers for the 2021/22 agriculture season.
Agriculture is the backbone of Zimbabwe’s economy, which sustains the economic, social and political lives of the majority of the people of Zimbabwe.
Government is aiming to achieve a US$8,2 billion agriculture economy by 2025 riding on the Agriculture and Food Systems Transformation Strategy, which seeks to achieve the targeted growth by 2025.
Through various agriculture support schemes, the Government has on its side committed billions of dollars in the sector while private sector funding has also come in handy.
In a statement accompanying financial results for year ending December 31, 2021, the bank said its business banking division continued to develop strong business relationships in the market across a diversified range of sectors including key areas supporting economic activity.
“We remained relevant to our Corporate and SME clients by providing customised lending products which meet their exact needs.
“The Agriculture sector was bolstered by the floating of a $2 billion Agrobond whose proceeds are being deployed in various agricultural value chains.
“The Bank signed a US$15 million credit line with a developmental finance partner which is currently being disbursed in selected long-term projects.
“This is up and above another line of US$20 million from a regional funder which was fully utilised,” reads part of the statement.
Despite these factors, the Zimbabwean economy continued to show signs of resilience and recovery.
The bank said various economic stabilisation initiatives, including the foreign exchange auction system introduced in June 2020, resulted in a significant drop in inflation with, year-on-year inflation dropping from a high of 837 percent recorded in July 2020, to 60.74 percent as of December 2021.
“Notwithstanding the economic headwinds, the economy achieved an economic growth rate of 7.8 percent on the back of the continuation of the tight monetary and fiscal consolidation, a good agricultural season and the stabilisation effect brought by the auction system,”.
Meanwhile, the bank said its capital adequacy ratio of the banking subsidiary remained strong at 57,48 percent compared to a regulatory minimum of 12 percent.
“The subsidiary maintained adequate capital levels to cover all risks and was compliant with the minimum capital of the equivalent of US$30 million.”
At the end of last year, the banking subsidiary owed US$13,4 million to various line of credit providers.