ZIMBABWE Stock Exchange-listed concern, PG Industries Zimbabwe (PGIZ) has entered into a strategic partnership with ZB Building Society to offer a credit facility for building materials.
Under the "Build Now, Pay Later Plan", customers apply for credit facilities to purchase building materials from PGIZ branches and brands such as DST, J&F, PG Timbers, PG Glass and Zimtile, among others.
Prospective builders are required to obtain a quotation of building materials from participating branches, and open an account with ZB Building Society, as well as a guarantee from their employer.
ZB Financial Holdings company executive and Head Business Development manager, Shadowsight Chiganze told Standardbusiness that the facility was open to anyone who has a ZB account subject to terms and conditions.
"The interest rate on this facility is calculated as per our standing personal loans. Interest rates on personal loans are determined by the tenure of the loan and risk profile of the customer. They range from 18% to 26% and the facility is repayable over 12 to 18 months," he said.
Chiganze said the approval process takes 48 hours.
He pointed out that the bank does not exclude the informal sector, as there are specific products available such as the Informal Trader Account which is a savings account offering free banking and allows for borrowing.
"We will shortly be launching specific lending products that are targeted at the informal sector, which will make it easier for this sector to borrow. We believe these products will go a long way in assisting the informal sector to access funding for their projects," he said.
The credit facility is also offered for other home improvement items such as boreholes, solar products, walls and kitchens.
With the prevailing tight liquidity conditions, the construction and built environment businesses have witnessed a protracted decline in demand levels for materials and contracts as more companies are devising innovative methods of remaining afloat in a market characterised by cutthroat competition.
The partnership comes in the wake of PGIZ recently having reduced its borrowings, with even more money being urgently required for working capital.
Market analysts say PGIZ faces a mammoth task to stimulate demand for its products as the company needs to grow its topline (gross sales or revenues) in the face of competition from Asian imports.
The company's subsidiary also faces tough competition from Turnall and Beta Tile which are rapidly taking up larger sections of the market.