Financial Gazette (Harare)
Dumisani Ndlela
25 September 2009
Harare — South Africa's Sasfin Bank, largely viewed as a bank for entrepreneurs, is planning a major investment in the country and has already held talks with a local banking institution which are reportedly advancing.
Market sources indicated that the bank was in talks with a local bank in which the International Finance Corporation (IFC), an investment wing of the World Bank, had a relationship.
There were suggestions the local banking institution could be NMBZ Holdings, dually listed on the Zimbabwe Stock Exchange and the London stock market. This could not be immediately verified during the week, although NMBZ has had a sound relationship with the IFC, together with African Banking Corporation (ABC), which recently received a cash injection from the World Bank's investment arm to boost operations.
ABC, which recently rebranded its banking units to BancABC, is however a Botswana bank due to its primary listing in that country, although its roots are largely Zimbabwean.
Reports from South Africa said the IFC had initiated talks between Sasfin Bank and two regional banks in a bid to prompt the Johannesburg Securities Exchange (JSE)-listed specialist bank to have a presence in the southern African region. Roland Sassoon, Sasfin Bank's chief executive officer had confirmed the reports, saying the other bank was in Zambia.
"The IFC wants us to have a presence in the region. We can offer these banks technical expertise," Sassoon said.
The IFC had introduced Sasfin to many financial institutions across the continent after the World Bank subsidiary invested US$30 million in the bank in July.
The IFC investment enabled Sasfin to increase lending to small and medium enterprises that often struggle to obtain funds from large commercial banks. The IFC's investment consisted of up to US$10 million in equity, a loan of US$10 million, and up to US$10 million in trade finance guarantees.
Sasfin is using the funds to increase the products it offers to smaller businesses, strengthening its environmental and social lending practices, and boosting foreign trade by South African companies.
Sasoon had said about the bank's plans to invest in Zimbabwe during an interview in March: "We were there before and we are in other parts of Africa -- we'd very much like to get back (to Zimbabwe)."
He added: "We haven't done anything there yet -- but we are looking at something right now. In fact there's a proposal on the table that's quite interesting."
The IFC has pledged to support Sasfin as it expands operations across South Africa and into Sub-Saharan Africa. A number of South African venture capitalist groups have already moved into Zimbabwe, with more companies preparing the ground for larger investments in the country.
The JSE-listed micro financier Blue Financial Services, Africa's largest micro lender, is also said to be planning to invest in Zimbabwe. Blue operates in 10 African countries and has nearly a million clients.
A number of offshore investors are targeting Zimbabwe because of its infrastructure which still remains robust despite years of economic decline.
Although there had been high expectations of massive infusions of foreign aid and investment, this has been slow but foreign investor confidence has been gradually firming against the backdrop of stability due to the dollarisation of the economy as well as an end to hostilities between waring political parties in the country which formed an inclusive government in February. An analyst said there were stacks of offshore capital targeted at Zimbabwe, but this was only waiting for a regime of investor friendly legislation to be put in place before it can start flowing in.
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