FBC to get $20m from Afreximbank

Published: 10 July 2014

FBC Holdings will soon start drawing down on the last tranche of $20 million out of the $60 million facility secured from Afreximbank after signing off papers for the release of the funds.

Group chief executive officer Mr John Mushayavanhu confirmed in an interview yesterday that the papers for the release of the three year loan facility had since been finalised.

"The papers have now been finalised. We are now in the process of drawing down on the loan. But first we have to go down to South Africa for the signing ceremony," he said.

The FBC boss said the funds from the three-year facility were secured at a floating rate of an average all in cost of 9 percent per annum.

He said the facility would largely benefit companies in the productive sectors, largely manufacturing, but targeting firms with good cash flows.

The financial services group recently said that it had cut down on lending to focus on collections to curb the rapid growth of non-performing loans, which has been rampant in the sector.

This has yielded results as FBC Bank's NPLs rate was now below 10 percent, which was a commendable turnout in a market currently with an average NPLs rate of at least 17 percent.

Further, the remaining NPLs were secured and therefore value was still maintained.

"We will be resuming lending cautiously in the near future on the back of accessed credit lines," Mr Mushayavanhu said at the company's annual general meeting a fortnight ago.

Fresh lines of credit would boost the performance of its flagship banking unit, FBC Bank, whose contribution to group before tax profit is currently around 54 percent from 44 percent last December. Mr Mushayavanhu said negotiations were underway for more funding.

Driven by strong performance of its banking unit, FBC has projected minimum growth rate of 5 percent per annum over the next 6 years.
- The Herald