Published: 04 February 2014

ZSE listed financial institution, NMB Bank, managed to raise $4 million during the floatation of the first tranche of its two-year $50 million mortgage-backed Small to Medium Enterprises bond issue which opened during the last quarter of 2013.

According to the plan, NMB seeks to carry out the bond issue in 5 tranches of $10 million.

The first $10 million tranche opened in October and closed in early December.

The bank's managing director, Benefit Washaya said the institution intends to raise $50 million in the long run for Small to Medium Enterprises but the facility is drawn down on an "in-need basis."

The earmarked SMEs should at the minimum have an asset base of between $10 000 to $2 million, employ five to 20 people and have an annual turnover of $30 000 to $5 million.

Facilities shall be availed for working capital, trade finance, asset financing, lease financing, order financing and capital expenditure. All loans created from the proceeds of the SME Bonds will be secured by the borrowers with immovable property.

Lending rates and associated charges will be within the framework of the law or any other prevailing legislation or agreement such as the recently signed Memorandum of Understanding between the BAZ and the RBZ (and any  amended, subsequent or successor Memoranda of Understanding).

Mr Washaya said the bank would continue monitoring the trading environment and has lined up another tranche from investors for projects under consideration during this quarter.
- herald

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