CBZ HOLDINGS TARGETS SMES:

CBZ Holdings, Zimbabwe’s biggest banking group (by assets and deposits) plans to expand its small to medium enterprise loan book by $10 million to stimulate growth in the sector, as profits rose 17 percent to 27,8 million in the year to December 2017.

The financial services group said it will lend around 20 percent its total loan book to the SMEs sector.

Currently, loans to SMEs total $40 million, representing 4 percent of the group’s loan book.

Group acting chief executive officer Peter Zimunya, said the banking group would continue tapping into the existing opportunities in the sector through availing financial support and linkages with both local and international businesses.

“Currently SMEs loans are at $40 million, out of our total book which is at $941 million. We are targeting to grow it to not less than 20 percent of our total book,” he said.

Mr Zimunya said an additional $10 million had been utilised for onward lending to the SMEs sector last year with another $5 million anticipated to be availed this year.

This also comes as CBZ registered a 28 percent growth in SME business, a year after launching the SMEs Annual Indaba, which seeks to grow the sector through linkages.

The business came from new SME business accounts, pension fund policies and insurance products; including funeral cash plan, motor vehicle insurance and home insurance.

Meanwhile, CBZ is geared for the second annual SME Indaba to be held in Bulawayo from March 21 to 23.

The Indaba, which will run under the theme “Enhancing SME growth through smart partnerships,” seeks to provide a platform for the strengthening of the sector’s contribution towards job creation, poverty alleviation, social and economic development as well as overall contribution to gross domestic product.

Both local and international potential partners will attend the Indaba. Already, a delegation of seven Indian firms has confirmed its participation at this year’s Indaba.

Indian Ambassador to Zimbabwe, Rungsung Masakui, said the delegation would be drawn from manufacturing, chemicals and fertilizer manufac- turing, biogas and mining value chains.

He said there was potential for the SMEs sector growth and Zimbabwe could take a cue from his country where the sector contributes about 40 percent of total GDP.

“We should not underestimate SMEs on low technology, they have growth potential to contribute towards GDP and exports,” he said, adding

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his country would continue to support Zimbabwe, especially now that the country was open for business.

Director of SMEs development in the Ministry of Industry, Commerce and Enterprise Development David Nyakonda said the growth of SMEs in both urban centres and rural areas could reduce the rural to urban migration.

He said SMEs needed handholding especially on financial services to ensure their growth as they graduate into large corporations.

In terms of financial performance for the year to December 31, 2017, the group posted an after tax profit of $27, 8 million, a 17 percent rise from prior year.

The improved profitability was on the back of a significant increase in non-interest income during the period under review.

CBZ’s total income stood at $175 million, up 10 percent from $159 million in the prior comparable period.

Management attributed this to growth in non-interest income, which was up 32, 3 percent to $91, 4 million from $69 million, previously. Net interest income took a different route sliding 7, 4 percent to $75, 6 million from $81 million.

The group’s assets rose 5 percent to $2, 2 billion from $2, 1 billion in the previous financial year.

Total deposits for the period were also up, jumping 4, 2 percent to $1, 85 billion from $1, 78 billion last year. CBZ is the country’s largest financial institution by deposits.

Advances were lower at $941, 4 million, a 6, 5 percent decline as the group adopted a more cautious approach to lending during the period under review.

The bank’s stock of Treasury Bills ( TBs) currently stands at $899, 9 million from $760 million in FY2016. The board declared a final dividend of $1, 76 million for the year.