SCB Funded Risk Participation – Zimbabwe

Africa Other consumer services

Our investment

In 2018, CDC and Standard Chartered signed a five-year risk sharing facility in which they will share the default risk on up to $100 million of new loans originated by Standard Chartered Bank Zimbabwe in the southern African state. The investment will be used for capital expenditure and for helping businesses meet their day-to-day financing needs. The likely recipients will include firms in the food processing, manufacturing and agriculture sectors.

Expected impact

The risk-sharing agreement provides much needed foreign currency capital for local businesses, allowing them to grow, create jobs and improve the country’s economic future.

The agreement has been established at a time (in 2018) when the Zimbabwean private sector faces a critical shortage of foreign currency for import of raw materials and other essentials after many years of economic decline. Local banks are unable to provide the capital needed by the mainstays of the Zimbabwean economy such as agribusiness and manufacturing, which are vital to the country’s economic growth and foreign currency generation from export markets. Zimbabwe has suffered through a 20-year economic crisis, which has resulted in an acute economic downturn and hyper-inflation that wiped out the Zimbabwean Dollar. Lending activities have been severely hampered in the country, and even more constrained given persistent currency shortages and limited external funding lines to banks.

Key facts

Status:
Active
Region

Since 2012, we’ve only invested in Africa and South Asia. Investments outside these regions are from our pre-2012 portfolio.

:
Africa
Sector

We have seven priority sectors. However, we continue to invest outside these sectors, largely in the most challenging regions, as new investment supporting any sector helps to underpin the private sector, and create jobs and livelihoods for people.

:
Other consumer services
Website:
https://www.sc.com/en/
Investment type

We provide capital in three broad ways: direct equity, debt, and intermediated equity (principally through investment funds).

:
Direct Debt
Amount

For direct investments, this is the total amount that CDC has committed to the business or project (it may be a combination of equity and debt).

For funds, this is the total amount that CDC has committed to the fund.

:
$27m
Domicile

This is the investee company’s place of incorporation; or a fund’s jurisdiction.

:
United Kingdom