Investors to benefit from PTA Bank deal

Dr Gondwe: Extending this facility to us is a mark of a healthy partnership between our European partners and ourselves Photo/FREDRICK ONYANGO

Small and medium sized enterprises are set to benefit from a Sh3.8 billion ($50 million) loan received by the PTA Bank from a consortium of lenders led by the International Development Bank of Netherlands (FMO).

PTA Bank will lend the money to SMEs seriously hurt by the credit squeeze that has lasted two years following the post-election violence and the global financial crisis of 2009.

“By extending this facility to us in light of the recent harsh global economic crisis, it is undoubtedly a mark of a healthy partnership between our European partners and ourselves. More critically, it will help us grow our portfolio and promote development of the bank’s member states,” said PTA Bank president Michael Gondwe.

The bank has received support from FMO since 2004 when the two institutions signed a trade finance facility of $15 million which was converted into a $20 million three-year facility in March last year.

Developmental mandate

“This and previous facilities continue to make a tremendous impact on the operations of the PTA Bank. We continue cementing relations with our partners as they are key to enabling us meet our developmental mandate,” said Dr Gondwe.

He assured the financiers that the funds would assist investors drive growth in their respective investments. FMO is the arranger of the long-term loan, carrying $20 million of the total facility and arranging another $30 million from the European Finance Partners (EFP).

The other European financiers are the European Investment Bank (EIB), BIO (Belgium), CDC (United Kingdom), COFIDES (Spain), DEG (Germany), FINNFUND (Finland), IFU (Denmark), NORFUND (Norway), OeEB (Austria), PROPARCO (France), Sifem (Switzerland) and SWEDFUND (Sweden).

The facility agreement with FMO was signed by Dr Gondwe and FMO’s Jurgen Rigterink at the Africa Finance & Investment Forum held in Amsterdam late last year.

But the disbursement took place on Monday.

Dr Gondwe said the partnership had been invaluable in strengthening corporate governance, and environment and social management practices within PTA Bank. The relationship has also led to an exchange of best practices.

Capital base boost

“These are areas that the PTA Bank is way ahead of others on the continent because of the support we have received from FMO,” Dr Gondwe said.

PTA Bank is a regional development financial institution mandated to promote regional integration by providing development capital to viable businesses in its member states.

Recently, the bank’s capital base was boosted to $2 billion.

It has 19 shareholders, namely the African Development Bank, Burundi, China, Comoros, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Malawi, Mauritius, Rwanda, the Seychelles, Somalia, Sudan, Tanzania, Uganda, Zambia and Zimbabwe.

FMO invests risk capital in companies and financial institutions in developing countries.

With an investment portfolio of 4.2 billion euros, it is one of the largest bilateral private sector development banks worldwide.

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