TDB, Untu in $3m SMEs financing

by Tawanda Musariri

Local Microfinance institution Untu Capital has secured a $3 million Small to Medium Scale Enterprises finance facility from the pan African Bank, Trade and Development Bank (TDB).

The two parties signed the deal in Harare Tuesday.

The TDB has a regional footprint in 21 African countries in the Comesa region together with two non-African member States, China and Belarus. The bank interests itself in trade financing, Agriculture; Banking and Finance; Manufacturing and Heavy Industries; Petrochemicals and infrastructure.

Women Affairs, Community, Small and Medium Enterprises Development Director David Nyakonda represented his minister Hon Sithembiso Nyoni who could not attend the occasion due to an ongoing cabinet meeting. Reading the minister’s speech, Nyakonda said, “The Ministry takes great pleasure in engaging Untu Capital in SME development. SMEs are an important cog of the Zimbabwean Economy.

“The financial sector plays an important role in the development of SMEs. This is important in financial inclusion for the small entrepreneur. SMES are a vehicle for employment creation and poverty alleviation. For this purpose, capacitating of the SME sector makes the sector competitive on the international market.”

Speaking before the signing ceremony, TDB President and CEO Admassu Tadesse said, “We are rolling this program first in Zimbabwe to support SMEs. The TDB is a specialized development finance institution; we have always understood that the true character and soul of a development institution is how it reaches out to the smaller development actors in the country. We have always been soul searching on how to reach the small players. You have an honour here in Zimbabwe to host the launch of a regional program.”

Untu capital is an aggressive player in the SME funding sector with the group maturing in its business portfolio to registering a microfinance bank in 2017 and raising $5 million capital earlier this year to fund its expanding operations. Untu Executive Director Clive Msipha signed the deal on behalf of his company while Tadesse signed the TDB memorandum.  

Untu Chairman Bartholomew Mswaka said his firm was looking at raising capital for the historically marginalised groups in the financing market, Women and Youths. He told delegates attending the loan signing ceremony that, “Capital is not a problem. The problem is bankable ideas, particularly from youths and women. We want to see them making an impact in their lives and in the community.”

Senior investment Manager for SMEs at TDB Mr Andrew Bamugye said, “We are looking at reaching out to impactful SMEs in 6 countries and we are starting with a $3 million pilot program. In Zimbabwe we have chosen Untu Capital. We are building a bridge between financiers and SMEs so they have a working relationship by de-risking the environment through giving credit guarantees. We are also keeping a keen eye on women and youths so that we can be seen to be impactful. We are looking at those with unique needs.”

Zimbabwe is a founding member of the TDB, formerly PTA Bank. The bank is headquartered in Zimbabwe to steer its regional operations. The bank has a total asset value of US$5.26 billion seeing it attain $111.86 million profit in the year ended 2017 inside an impressive 17% growth in the past five years.