ZB Bank Limited has secured a US$5 million facility from the African Export-Import Bank (Afreximbank) for on-lending to small and medium enterprises (SMEs).
SMEs have been struggling to access funding from banks, which prefer big corporates.
The facility was signed on Friday during Afreximbank’s annual meetings in Abuja, Nigeria.
ZB Bank chief executive officer Elisha Chibvuri signed on behalf of the bank, while Kanayo Awani, executive vice-president Intra-African Trade & Export Development
Bank, represented Afreximbank.
“We signed a US$5 million facility for SMEs. We want to support those SMEs who are into exports,” Chibvuri told NewsDay Business.
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We are looking at the impact. US$5 million for SMEs means we can accommodate a lot of them.”
He said the facility will accommodate working capital and capital expenditure requirements and has a tenure of five years.
“For SMEs, this facility means growth and expansion. We want to make sure that once SMEs get an opportunity to access funding, they are able to help the downstream industry. What has been happening is that we have big companies that are getting funding and on-lending to small business players. This facility allows the SMEs to come directly to the bank and get cheaper funding. The cycle they fund themselves would be much quicker,” Chibvuri said, adding that they are in discussion with Afreximbank to increase the purse size such that “the next time we will be talking of US$20m to US$25 million”.
The US$5 million kitty is the first Afreximbank facility for SMEs in the country.
“We are happy to be one of the banks offering this facility, specifically for SMEs, because all facilities that have been coming so far are for the big corporates,” Chibvuri said.
This is the third facility the bank has secured from Afreximbank.
“We have a US$20 million facility that is running, which is under the energy fund. The balance at the moment is below US$5 million. We are expecting that to be renewed to around the same level,” Chibvuri said.
“We have another US$10 million facility, a guaranteed facility, that is divided into two: one of them requires security of cash cover, and another one that doesn’t require cash cover. So, for the one that requires a cash cover, our customers are not able to draw it down because if they can raise
cash, they don’t need the money.”
“That’s why we are basing the negotiations with Afreximbank to say let’s have better terms for our clients and make sure that the security is based on what they can export.”
