European Investment Bank officials to visit, could extend credit to private sector

European Investment Bank officials to visit, could extend credit to private sector

By Bernard Mpofu, HARARE, April 1 (The Source) – A team of officials from the European Investment Bank is expected to visit Zimbabwe this month amid hopes the bank could extend credit facilities to the local financial services sector for on-lending to industry, sources close to the developments have said.

EIB is the European Union’s non-profit long-term lending institution established in 1958 and its largest multilateral borrower and lender by volume.  While it mainly focuses on Europe, it also supports the bloc’s external and development agendas.

The European Union (EU) last year lifted its 12-year suspension of direct financial aid to the government of Zimbabwe, imposed after allegations of rights abuses by President Robert Mugabe’s administration citing improvements in the political environment after the adoption of a new constitution and peaceful polls last year.

Earlier this year the EU gave Zimbabwe $270 million in development assistance with most of the funds going towards agriculture, health and institutional building.

But Harare, which is grappling with a nearly $10 billion debt is currently not eligible to borrow from the bank, but officials said the EIB was amenable to lending to the private sector.

The sources said the mission is also expected to visit Bulawayo, the country’s once thriving industrial hub, on a fact-finding mission.

“EIB officials will be in the country between the 13 and 17th of the April to seek ways to extend credit to local banks. As you might know, government owes the bank and cannot to benefit from it at the moment,” said an official.

This development comes as the European Union has secured €7 million to assist government in implementing the Economic Partnership Agreement signed in 2012.

The EPA is seen as a catalyst to boost trade between Zimbabwe and the bloc.

Figures obtained from the ITC, a joint agency of the World Trade Organisation and the United Nations, show that Zimbabwe’s exports to the EU grew to $153,321,000 in 2014 from $31,106,000 the previous year, with exports of the unprocessed gems making up the bulk of the sales.