AfDB approves $15M Trade Finance Package for First Capital Bank in Zimbabwe

The package consists of a $7.5 million trade finance line of credit coupled with a $7.5 million transaction guarantee, with the aim of catalyzing approximately $146 million in trade over the course of the next three years.

The Board of Directors of the African Development Bank Group (AfDB) has greenlit a $15 million trade finance package for First Capital Bank (FCB) in Zimbabwe, marking a significant step towards bolstering intra-African commerce in alignment with the objectives of the Africa Continental Free Trade Area (AfCFTA).

The package consists of a $7.5 million trade finance line of credit coupled with a $7.5 million transaction guarantee, with the aim of catalyzing approximately $146 million in trade over the course of the next three years.

This initiative is poised to inject a much-needed boost into the Zimbabwean economy, particularly in supporting small and medium-sized enterprises (SMEs) and local corporates. The trade finance line of credit will provide crucial hard currency financing, bridging the trade finance gap and facilitating the expansion of FCB's trade finance services.

Furthermore, the transaction guarantee component will offer a 100% guarantee to international confirming banks for the non-payment risk associated with FCB's trade finance transactions, particularly those conducted on behalf of SMEs and women-led businesses.

Tapera Mushoriwa, CEO of FCB, expressed excitement about the growth opportunities this $15 million facility will unlock for Zimbabwe's business community. The package is strategically designed to enhance FCB's trade finance capabilities both domestically and internationally, positioning the bank as a key player in facilitating trade within Zimbabwe, across Africa, and on the global stage.

Moono Mupotola, African Development Bank Zimbabwe Country Manager, emphasized the strategic significance of the facility in supporting the importation of strategic commodities and promoting the integration of Zimbabwe's economy into regional and global trade markets. This integration is vital for the country's economic growth trajectory, underscoring the AfDB's commitment to fostering sustainable development across the continent.

The approval of this trade finance package reflects the AfDB's dedication to supporting inclusive and sustainable economic growth in Zimbabwe and beyond, aligning with the broader objectives of the AfCFTA to promote intra-African trade and economic integration.