HARARE - Old Mutual’s mortgage lender Central Africa Building Society (CABS) has received a $10 million loan from a French financial institution, Proparco.
The facility — with a five-year tenure — is targeted at bolstering long-term financing for Zimbabwean businesses.
Proparco is a development finance institution partly held by Agence Française de Développement (AFD) and private shareholders.
The organisation recently advanced a $10 million loan to NMB Bank.
Its objective is to be a catalyst for private investment in developing countries with focus on sustainable development and attaining the Millennium Development Goals (MDGs).
Proparco’s loan, market observers say, will allow Cabs to finance the development of its credit portfolio and extend the maturity of its financing for Zimbabwean businesses as funding is only available on short-term basis.
Jean-Michael Debrat, Proparco’s regional director for southern Africa, noted that in a context of economic restructuring and need for finance, the loan would help the private sector grow.
“With this second transaction in the banking sector in Zimbabwe, Proparco hopes to play a catalytic role by attracting foreign investors and contributes to support the financing need of the economy.
“This partnership with CABS is all the more interesting that it will foster medium and long-term credit to corporates and individuals in the mortgage sector,” he said.
With total assets of $575 million-plus, a strong mortgage asset base and a range of financial service offerings, CABS ranks in the top three of Zimbabwean banks.