CABS Secures $110 Million Credit Line for Key Economic Sectors

CABS, a member of the Old Mutual Group, has secured a substantial line of credit amounting to US$110 million from AfreximBank and the Trade and Development Bank. The funds, received in 2023, are intended to be used for on-lending to key economic sectors in Zimbabwe, including agriculture, mining, energy, and manufacturing.

In its 2023 annual report, CABS expressed its unwavering commitment to supporting both public and private sector investments in the country. The bank’s Managing Director, Mr Mehluli Mpofu, highlighted the institution’s efforts to secure offshore lines of credit for on-lending purposes. He emphasized that the US$110 million was obtained through partnerships with AfreximBank and the Trade and Development Bank.

Apart from facilitating lending to vital sectors of the economy, CABS also aims to support small and medium-sized enterprises (SMEs) through value chain financing and financial literacy programs. The bank recognizes the importance of fostering the growth of SMEs and believes that these initiatives will contribute to their success.

Furthermore, CABS received a grant from the African Development Bank as part of the Affirmative Finance Action for Women in Africa (AFAWA) program. This grant will be utilized to implement a technical assistance program focused on the development of women-led small, micro, and medium enterprises (SMMEs). The bank’s commitment to empowering women entrepreneurs aligns with efforts to promote gender equality and economic inclusivity.

CABS has also been actively facilitating cross-border trade by deploying trade facilities such as transaction guarantees and letters of credit. These services benefit both exporting and importing customers and contribute to seamless international trade operations. The bank’s dedication to supporting industry and commerce is evident through its efficient processing of collections and payments, as well as the deployment of additional point-of-sale machines and multi-currency POS terminals.

Mr Mpofu highlighted the role of financial literacy in CABS’ operations, emphasizing the contributions made through Old Mutual’s on-the-money training program. This initiative plays a crucial role in providing essential financial knowledge to existing and potential customers, empowering them to make informed decisions regarding their finances.

Despite economic challenges, CABS experienced notable growth in its surplus, which increased by 202 percent to $429.27 billion in inflation-adjusted terms. The surge in non-funded income, driven by payment transactions in key economic segments, played a significant role in this achievement. Additionally, the bank’s digitalization strategy, aimed at enhancing customer experience, proved successful by expanding transaction channel options and introducing US$ services to digital channels.

CABS’ lending activities were supported by the introduction and growth of USD digital lending channels, including EezyCredit and Flexicredit. These platforms facilitated convenient access to credit for customers. The bank’s net interest income also saw substantial growth, increasing by 246 percent to $83.39 billion, while net fee and commission income surged by an impressive 1,067 percent to $139.18 billion.

CABS’ achievements in securing lines of credit, supporting key economic sectors, empowering SMEs, and embracing digitalization reflect its commitment to driving economic growth and financial inclusion in Zimbabwe.