AfDB approves US $50 million to ABC Holdings Ltd. in Botswana, Mozambique and Zimbabwe
The Board of Directors of the African Development Bank Group (AfDB) through its private sector window approved on March 11, 2015 a US $50 million multi-currency line of credit (LoC) with a seven-year tenor to ABC Holdings Ltd. and its subsidiaries in Botswana, Mozambique and Zimbabwe.
ABC Holdings Ltd. (ABCH) is a rapidly growing financial institution targeting local small and medium enterprises (SMEs) in these countries covering various sectors such as construction, agriculture, manufacturing, transport and services. ABCH is gradually increasing its SME portfolio share targeting 30% by end 2018 as it plans to expand its retail network across countries.
The AfDB LoC will enable ABCH and its three selected subsidiaries to reach a larger number of SMEs across a wide range of sectors by offering medium- to long-term loans, which are not currently accessible for local SMEs. The AfDB will provide local currencies, Botswana Pula and Mozambique Metical to support local currency lending and promote development of the financial sector in these countries. This facility will also cover Zimbabwe where many enterprises face liquidity challenge. The facility is expected to support at least 200 SMEs and generate 800 jobs, including 400 jobs for women, during the period of the project. Leveraging the relatively long tenor of the AfDB facility, it is expected to increase the average loan tenor for SME clients who can consequently expand their business, which will promote inclusive growth of these countries.