(AfDB) - The African Development Bank and NMB Bank Limited Zimbabwe (NMB) have signed a $15 million Trade Finance Transaction Guarantee Facility to unlock trade finance opportunities for Zimbabwean small and medium-sized enterprises and those in agri-business and trade distribution value chains.

The signing took place on 7 March at NMB Bank Headquarters in Harare. Moono Mupotola, African Development Bank Country Manager, and Gerald Gore, NMB Bank Chief Executive Officer attended.  The African Development Bank’s board approved the project in November 2023.

The facility offers up to 100% coverage to confirming Banks, effectively mitigating non-payment risks linked to NMB Bank's trade transactions on a per-transaction basis.

It is tailored to support trade between Zimbabwe and other African countries and with overseas markets by significantly diminishing the risk for international financial institutions actively engaging in trade finance activities with Zimbabwean businesses.

Country Manager Mupotola attended the signing. She said: “The African Development Bank is committed to supporting the development of the private sector in Zimbabwe. This is a significant step forward in supporting the growth and competitiveness of Zimbabwean businesses. By mitigating risk and facilitating access to trade finance, we are empowering SMEs and local corporates to participate more actively in regional and international trade.”

SMEs often face challenges in accessing trade finance compared to their larger counterparts. This initiative directly addresses this gap, fostering a more vibrant and inclusive business environment in Zimbabwe.

Gerald Gore, CEO of NMB Bank emphasized the agreement's importance for Zimbabwe’s economic development. “This facility will be instrumental in enabling NMB to provide crucial trade finance support to a wider range of Zimbabwean businesses. This will not only unlock new trade opportunities but also contribute to job creation and economic growth,” he said.

In December 2023, the Bank’s board of directors approved a $20 million trade finance line of credit to Central Africa Building Society (CABS).

The project aligns with the Bank’s country strategy paper for Zimbabwe 2024-2026, which prioritises private sector development. It is also aligned with several priorities of the Zimbabwe Vision 2030, which aims to transform Zimbabwe into a prosperous and empowered upper-middle-income society by 2030.