AfDB Approves U.S $50 Million Facility to ABC (

The African Development Bank (AfDB) through its private sector window has approved a seven-year $50 million line of credit to ABC Holdings and its subsidiaries in Zimbabwe, Botswana and Mozambique.
In a statement, AfDB said ABCH is gradually increasing its SME portfolio share, targeting 30 percent by the end of 2018 as it plans to expand its retail network across the countries it operates.
“The board of directors of the African Development Bank Group through its private sector window approved on March 11, 2015 a $50 million multi-currency line of credit with a seven-year tenor to ABC Holdings Ltd and its subsidiaries in Botswana, Mozambique and Zimbabwe,” it said.
AfDB said the facility would assist Zimbabwe where many enterprises face liquidity challenges and is expected to support at least 200 SMEs and generate 800 jobs, including 400 jobs for women, during the project period. ABC Holdings Ltd is a rapidly growing financial institution targeting local small and medium enterprises in these countries covering various sectors such as construction, agriculture, manufacturing, transport and services.
The AfDB facility 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.”
The banking group said 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.
AfDB aims to support the implementation of its Private Sector Development Strategy by providing untied grants for technical assistance and capacity building to African governments, regional economic communities and similar intergovernmental organisations, business associations, market regulatory institutions, business development service providers, business training and research institutions, and public/private enterprises.
Grants under the AfDB enhance the bank’s ability to be more active in the upstream phases of the project preparation cycle in order to reinforce the quality of its pipeline of bankable private sector transactions.
The resources may also be used to promote innovative programmes that specifically support small- and micro-scale enterprises and clean technologies, including the provision of seed money for start-ups, business incubators among others.
Last year AfDB released a total sum of about US$147 million to Kenya’s Equity Bank where the funds were meant to be distributed to small businesses in Kenya.
Source: Business