African Development Bank approves $15m trade finance package for Zimbabwe's FCB

The African Development Bank Group's Board of Directors has approved a $15 million trade finance package for First Capital Bank (FCB) in Zimbabwe. This move aims to bolster intra-African commerce, aligning with the objectives of the Africa Continental Free Trade Area. The package consists of a $7.5 million trade finance line of credit and a $7.5 million transaction guarantee, projected to catalyse approximately $146 million in trade over the next three years.

The line of credit will provide essential hard currency financing, enabling FCB to close its trade finance gap and expand its support for SMEs and local corporates in Zimbabwe, a transition country. The transaction guarantee will offer a 100% guarantee to international confirming banks (CBs) for the non-payment risk assumed on FCB’s trade finance transactions conducted on behalf of SMEs and women-led businesses.

Mr Tapera Mushoriwa, CEO of FCB, expressed his excitement about the growth prospects that this $15 million facility will unlock for business communities driving Zimbabwe's economy. He said, "The package aims to bolster our trade finance services in Zimbabwe, across Africa, and globally.”

Moono Mupotola, African Development Bank Zimbabwe Country Manager, highlighted the strategic importance of the facility. She stated, “The facility is expected to support the importation of strategic commodities and promote the integration of Zimbabwe’s economy into regional and global trade markets, which are essential for the country’s growth.”

About the African Development Bank Group's trade finance instruments: The Bank Group’s Trade Finance lines of credit have a maximum tenor of 3.5 years and extend vital financial support to banks facilitating trade transactions in Africa. This includes imports, exports, pre-shipment, and working capital. Through its Transaction Guarantee, the Bank Group leverages its “AAA” rating to provide up to a 100% guarantee to confirming banks for non-payment risk they take on African local banks’ trade finance transactions, thereby reducing the need for cash collateral.