Economy, Business And Markets

Iran Considers Giving Loans to Zimbabwean Banks

Iran Considers Giving Loans to Zimbabwean BanksIran Considers Giving Loans to Zimbabwean Banks

Iran has expressed interest to channel millions of dollars to Zimbabwean banks as lines of credit depending on the individual financial institution’s creditworthiness.

President of the Export Guarantee Fund of Iran Seyyed Kamal Seyyed Ali told the Business Digest magazine this week that his institution was willing to channel loans to Zimbabwean creditworthy banks at affordable interest rates, Zimbabwe Independent reported Friday.

 “We are looking for some buyers here to sell our financing. We are going into cooperation with banks if we find some banks with creditworthiness and capacity to pay back our money,” said the EGFI president on the sidelines of the maiden global micro small and medium-sized enterprises expo held in Harare.

Seyyed Ali said the institution can channel up to $40 million directly to countries.

“Our interest rates are (London Interbank Offered Rate) Libor plus 2-3% interest per annum. It depends on which bank is going to cooperate with us but we are going to give finance for one to two years,” Seyyed Ali added.

The EGFI president said CBZ Bank has been a beneficiary of their fund after receiving $15 million worth of loan from the Export Development Bank of Iran five years ago.

“We gave $15 million to CBZ five years ago. They have some outstanding amounts and they are going to reschedule it.

“So far they have paid two installments and in September they will pay another installment. If they (CBZ) pay back, this will encourage the Export Development Bank of Iran to give other loans to local banks,” he said.

Seyyed Ali said Iranian companies are keen to invest in the country.

About 28 companies with expertise in banking and finance, science and technology from Iran participated in the event.

Seychelles, India and Indonesian companies also graced the exhibition.

Zimbabwe’s Economic Planning and Investment Promotion Minister Simon Khaya Moyo told delegates at the same event that low business confidence, limited fiscal space and subdued international prices for major exports were responsible for massive job losses in the country.

Moyo urged Iranian companies to invest in the special economic zones, which are set to be new means to mobilize foreign investment. China is assisting in the establishment of the SEZs through technical support.

SMEs, suffering from limited access to financial resources, are blamed for 85% of joblessness in Zimbabwe.