European Bank warms up to Zim

Source: European Bank warms up to Zim – DailyNews Live 29 April 2016

HARARE – The European Investment Bank (EIB) has finally resolved to extend technical and financial support to Zimbabwe’s financial services sector, a top envoy has said.

European Union (EU) ambassador to Zimbabwe Philippe Van Damme yesterday said the process was expected to be finalised by March this year, but was delayed due to “technical issues”.

“A lot of technical issues came up which delayed a delegation that was expected in the country during the first quarter. However, an agreement has been reached and we are now expecting a team from the EIB around mid-May to June,” he said.

The EIB is owned by the 28 EU countries and borrows money on the capital markets and lends to both inside the EU and in neighbouring or developing countries.

A team from the bank had been expected to run final due-diligence procedures in the financial services sector as the bank geared to extend new lines of credit to the sector, but board approvals stalled the final visit.

Van Damme said the bank had also resolved to send along with the team, members who would look at the retail sector with the intention to extend support to private players in the sector as well.

The board, according to the EU envoy, had acted on latest appraisal of the situation in the country regarding economic conditions and had examined viable sectors in need of support.

Van Damme was quick to point out that the country, saddled with over

$7 billion debt, did not qualify for any direct funds from the bank as yet.

“We are pleased with Zimbabwe’s debt reform strategy and hope that next week’s discussions will go well. The bank is looking forward to working with the Zimbabwean private sector at the moment,” Van Damme said.

The prospect of an extension of credit facilities to the local financial services sector for on-lending to industry from the EIB comes after the European bloc lifted sanctions imposed on Zimbabwe 13 years ago on allegations of human rights abuses.

Another EIB technical team was in the country in the last quarter of 2015 assessing the private sector to identify viable projects and financial institutions to avail fresh capital.

During the first visit earlier in 2015, EIB officials met with Finance minister Patrick Chinamasa, central bank governor John Mangudya and several players in the private sector with special emphasis on the financial services sector.

Market watchers, expect the assistance to go a long way as the financial services sector is presently grappling in the throes of a cash crisis.