Barclays Bank Zambia managing director Mizinga Melu says the bank has targeted to lend out in excess of K50 million to the Small and Medium Enterprises (SMEs) sector by the end of this year.
And Melu says the mining sector remains key to Barclay’s growth.
In an interview in Lusaka, Melu said Barclays waived off collateral requirements for SMEs seeking financing as a key strategy in a bid to help grow the sector.
“We have been able to lend, probably slightly above K40 million so that’s something that we recently started and it has been an exciting journey for us and we are hoping that by the end of the year, we should be definitely above K50 million. For us, we are linking our SME business, we are looking at them as a complete value chain, that’s really where we are getting the benefit,” Melu said.
“The first thing that a common bank would ask is: ‘do you have financials?’ Barclays, ABSA we are waiving those. We are saying, if you are an SME and you are looking for funding from the bank, we will not ask you for financials. The second thing that we are waiving is collateral; you are as an SME, you are coming to the bank, we will not ask you for collateral, but what we will ask you is, who you are supplying, because we are now looking at the value chain. If you are supplying any of the large corporates, then we will take a risk on the corporate as opposed to the SME, so meaning we get rid of the collateral requirement that SMEs would ordinarily be asked to provide, which tends to be very difficult for them. So, for us, by waiving those major conditions, we believe that we will be making a fundamental difference in growing the economy.”
She also announced that the bank had provided financing of about US $7 billion in the mining, energy and agricultural sectors in the last three years.
“We are investing heavily in bringing development to our people. It’s about how do we provide solutions to the different sectors, be it mining, energy, agriculture and in there, we have up-to-date invested (provided finances) of about US $7 billion in the last three years. Just keeping mining, agriculture, energy if you know we did the Maamba (Coilleries) deal, that was a huge deal and some of them we can’t really talk about because of confidentiality, but mining is a huge sector for us. Energy, manufacturing and also the value chain linkages, especially when you look at SMEs,” she said.
And Melu further noted the importance of the mining sector to their growth.
“When you relook at the market, Zambia and globally also, one of the biggest strengths that we continue to have are the copper prices. The copper prices have been very strong so I think we have really looked at that and they have remained at the US $6,000 (per tonne) levels and I think that is very good. When you look at the agriculture sector broadly, the agriculture sector has done well as well and, of course, as a country, the Monetary Policy (Rate) has done well. And we have had challenges on the fiscal (side) and I think that’s common knowledge. But I think, as a bank, is how do we, amidst all these challenges, bring the possibilities to life and still make it work and that’s what our focus is,” said Melu.
“I think our performance has been great, I am very proud! Our balance sheet has grown; if you look at our asset and deposits, we are the second largest bank in terms of deposit-taking, our assets have grown as well. We have had a strong H1 (2019 half-year) considering the environment that we are going through, we have been very proud of our performance.”