With its mining loan book now making up 18% of its whole portfolio, CBZ Holdings has made a bold effort to demonstrate its commitment to the economic development of Zimbabwe by dramatically increasing the amount of loans it offers to the mining industry. Phibeon Mutibura, the executive director of CBZ Holdings, brought attention to this development during the recent Chamber of Mines of Zimbabwe 2024 annual conference held in Victoria Falls.
Mutibura spoke on the bank’s committed endeavors to support the mining industry, which is a crucial component of Zimbabwe’s economy. He said that CBZ’s comprehension of the complexities of the industry and its capacity to improve communities has inspired the bank to provide strong financial solutions specifically for the mining sector and the value chains that surround it. “Our loan book for the mining sector has expanded significantly from roughly 7% in 2021 to the current 18%,” Mutibura stated, illustrating the bank’s increasing focus on this vital area.
In an effort to promote financial inclusion, CBZ unveiled a cutting-edge financial product designed to aid in the growth of regional businesses along the mining value chain. This creative strategy goes above and beyond conventional banking practices, providing funding to support regional businesses and suppliers associated with the mining sector.
The significance of local enterprise development (LED), which aims to establish business ties between suppliers, major mining firms, and small and medium-sized businesses (SMEs), was highlighted by Mutibura. “We are dedicated to making sure that, in our efforts to promote financial inclusion, no business or community is left behind,” he said.
CBZ has established multiple partnerships with leading mining houses and their suppliers, making significant growth in enhancing these connections. The bank continues to sign memoranda of understanding under its enterprise supplier development (ESD) financing structure, targeting SME suppliers who serve as regular providers for major mines. These agreements facilitate access to capital for SMEs, enabling them to increase production capacity and contribute more significantly to the mining sector.
To qualify for this financial support, each supplier must be endorsed by a mining company, verifying their role in supplying products or services to the mines. CBZ then provides a range of financial assistance, including working capital, short-term loans, and funds for capital expenditures and new equipment. This support also extends to aiding local suppliers in manufacturing, helping to reduce reliance on imported goods.
The ESD program addresses several challenges typically faced by SMEs, such as limited access to finance due to insufficient collateral, lack of financial records, or poor credit histories. By empowering these smaller enterprises, the program not only promotes financial inclusivity but also ensures that Zimbabwean mines can meet their operational needs efficiently, without supply disruptions.
Moreover, by boosting local enterprises, ESD contributes to creating jobs and enhancing livelihoods in communities across Zimbabwe. It also aids in conserving foreign currency by substituting imports with locally produced goods.
