Credit lines for banks

has also proposed an additional three-year housing development facility for local building societies.
Finance Minister, Tendai Biti also announced that Treasury last week agreed on a US$15 million facility for small and medium enterprises working capital with the Arab Bank for Economic Development in Africa.
Speaking during the signing ceremony of the Bilateral Investment Promotion and Protection Agreement between Zimbabwe and Botswana in Harare on Monday, Minister Biti said the housing facility would be administered through CBZ Bank.
“PTA Bank is currently working on a three-year housing development facility with local building societies,” he said.
“This is critical in reviving the mortgage facility that was last functional in the 1990s.”
Zimbabwe has endured a protracted mortgage stress that set in at the turn of the decade when savings started a steep decline, which worsened over the years and eventually slumped in 2008 to an all-time low.
“Of late we have started to see a number of mid-term lines of credit such as the US$30 million line of credit to Agribank from the Industrial Development Corporation of South Africa with low interest rates of about 4 percent,” said Minister Biti.
CBZ Bank, FBC Bank, Metropolitan Bank, Kingdom Bank, Cotton Company of Zimbabwe and Blue Ribbon Industries are some of the beneficiaries of the credit line.
Minister Biti added that the Government, the private sector and financial institutions continue to pursue credit lines, particularly from Afreximbank and the PTA Bank.
Some companies have been receiving financial assistance from parent companies domiciled outside Zimbabwe.
PTA Bank, established in 1985, disbursed a cumulative US$6 billion in 2010 to its 17 member states.
The bank has also played an active role in promoting the Common Market for Eastern and Southern Africa regional integration.
Notwithstanding the challenges the country has faced, the regional bank continued to support Zimbabwe with lines of credit.
PTA disbursed these funds at a time when the local banking sector is reluctant to advance loans to the private sector due to liquidity constraints emanating from the global financial crisis.
The country’s banking sector failed to attract meaningful external lines of credit, which resulted in local money being very expensive due to perceived high country risk.
PTA Bank provides project and infrastructure finance and trade finance as its core products and services. Project and infrastructure finance is the medium term lending window of the bank.
These facilities are available to businesses and enterprises incorporated and doing business in the PTA Bank member states.
In the case of PTA Bank, project finance loans have tenures ranging from three to ten years, including a maximum grace period of three years.
Longer tenures can, however, be negotiated, depending on a project’s financial and operational requirements.