Project General Description
The present intervention is relative to the Central Africa Building Society (CABS) Trade Finance Line of Credit. The proposed TFLOC will be availed to CABS for purposes of on lending to its clients, who include local corporates and SMEs. It's a medium-term Trade Finance (TF) facility to support the expansion of its operations as a provider of trade finance to indigenous firms and SMEs in the tradable sector in Zimbabwe. Indeed, this LoC-FC proposed to CABS will be retroceded to its clients (which include local businesses and SMEs). Over the next 3 years, CABS intends to grow its annual trade finance volumes from its current level of about USD 500 million to USD 1.2 billion per annum with a view to becoming a prominent provider of trade finance to SME’s in Zimbabwe. This liquidity support will enable CABS expand its trade portfolio and increase access to affordable trade finance for SMEs in the short term. African Development Bank’s support will not only avail the much needed medium tenured funding needed in the economy, but will also have an important “demonstration effect” which may prove vital to enhancing CABS’s financial sector’s ability to access trade finance lines from the international debt markets.
The main beneficiaries of this proposed facility are local corporates and SMEs that are active in the productive economy, export promotion and intra-regional trade, which promotes regional integration.