The African Export-Import Bank (Afreximbank) has extended a US$15mn facility to Ecobank Zimbabwe aimed at helping SMEs participate in export value chains.
The facility will provide working capital and capital expenditure financing under Afreximbank’s export SME development programme (ESDP), focusing on key sectors such as agribusiness, manufacturing, healthcare and logistics.
It combines Afreximbank’s “trade finance expertise with Ecobank’s extensive local footprint and client relationships”, the Cairo-headquartered multilateral development bank (MDB) said.
“Under the facility, enterprises that form the productive backbone of Zimbabwe’s economy, yet remain chronically underserved by conventional lending, will have access to financing,” Afreximbank said.
SME financing has long been a challenge, particularly on the African continent, due to perceptions that smaller businesses represent a higher credit risk to lenders. This week, the African Development Bank reported that Africa’s trade finance gap has held above US$74bn annually in recent years.
Earlier this year, Afreximbank launched the Gulf Crisis Response Programme, a US$10bn trade-focused support scheme for African and Caribbean economies exposed to the Middle East crisis.
Oluranti Doherty, managing director for export development at Afreximbank, said the Ecobank Zimbabwe facility “exemplifies the kind of high-additionality, high-impact intervention that the ESDP was designed to deliver, addressing market failures that commercial finance alone cannot resolve, and building the productive capacity of enterprises that are central to Africa’s trade transformation”.
“It therefore goes beyond providing credit; it is a structured commitment to building the capacity of enterprises that can drive Zimbabwe’s participation in intra-African trade and regional value chains.”
Doherty added that each SME will also be “equipped, connected and positioned to grow sustainably”, in addition to receiving funding.
Ecobank Zimbabwe, a subsidiary of Togo-headquartered pan-African banking group Ecobank Transnational, will offer SMEs financial and business advisory solutions through its existing product suite and infrastructure.
Afreximbank will also provide support for loan management, improving export readiness, marketing and digitalisation.
Moses Kurenjekwa, managing director of Ecobank Zimbabwe, added that the facility “speaks directly to our commitment to unlocking the potential of Zimbabwe’s SME sector”.
“Small businesses are the engine of our economy, and access to appropriate, export-linked financing is what enables them to grow, create jobs, and compete regionally,” he said.
Afreximbank recently announced its results for the three months to March 31, reporting a 2% growth in total credit exposure to US$42bn.
The MDB also posted net interest income of US$510mn, up 24% year on year, and a capital adequacy ratio of 23%.
At the start of this year, Afreximbank ended its credit ratings relationship with Fitch, accusing the agency of failing to understand its mandate. Fitch had downgraded it to BB+ – ‘junk’ status – after citing concerns over non-performing sovereign loans in Ghana and Zambia.
Afreximbank continues to hold investment grade ratings from China Chengxin (AAA), African rating agency GCR (A), Japan Credit Rating Agency (A-), and Moody’s (Baa2).
