Emmerson Njanjamangezi, Group Features Editor 
The European Investment Bank (EIB) has extended a US$18 million facility to CABS for on-lending to the private sector, marking the bank’s first engagement with Zimbabwe in over two decades.
The facility, which points to the thawing relations between Harare and Brussels, is earmarked for retooling and capitalising local companies in the wake of the Covid-19 pandemic.
In a statement yesterday, head of delegation of the European Union to Zimbabwe, Timo Olkkonen said the credit line would be a huge boost to Zimbabwe.
“Memorable moment, the European Investment Bank and CABS unveil EUR15 million Covid-19 resilience business financing initiative, the first-ever EIB partnership with a Zimbabwe commercial bank and first engagement in Zimbabwe in 22 years. Huge step for access to finance in the country,” Olkkonen said.
The local industry has been hamstrung by a litany of challenges, chief among them the lack of access to concessional capital. And the Covid-19 outbreak worsened those challenges, resulting in some companies completely folding.
Earlier this year, CABS managing director Mehluli Mpofu expressed confidence that the local economy would improve and indicated that the bank would play a central role in financing the productive sector.
“The relative economic stability registered from the second half of 2020, coupled with the good rains received this season, give hope of a better outturn as all fundamentals are addressed.
“The society will continue to play its part in the country’s economic recovery by providing full banking services to our customers,” Mpofu said.
Mpofu, said the bank had increased lending to corporate clients in the agriculture sector, noting that foreign currency loans were also on the rise.
The loan book grew from $6,67 billion to $7,05 billion, which was complemented by a decline in non-performing loans from two percent in 2019 to less than one percent in 2020.
“The society continues to seek opportunities to invest in sectors that will help grow the economy.
“This has led to an increase in lending to corporate clients in the agriculture sector as the society complements the national effort to revive agriculture.
“The contribution of foreign currency loan facilities to the book rose to 40 percent as the society continues to pursue its strategy of investing in productive sectors of the economy, particularly focusing on entities seeking to grow their export generating capacity,” Mpofu said.
CABS posted a $1,59 billion surplus for the year ended December 31, 2020 from a $710 million loss in 2019 on the back of improved income and cost containment activities.
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