African bank loans Zimbabwe $100m to ease credit crunch

The African Export-Import Bank on Saturday announced a $100 million (72 million euro) loan to Zimbabwe's banking sector to ease a credit crunch that has deepened the country's economic woes. "It is a well-known fact that the Zimbabwean banking sector and economy at large are currently experiencing severe liquidity challenges," president Jean-Louis Ekra of the Cairo-based bank said at a ceremony to launch the loan in Zimbabwe's capital Harare. "This situation is making it difficult for many companies, including small to medium enterprises, to access finance at affordable costs." The loan is designed to kick-start lending from more solvent banks to those struggling with debts. Riots broke out at the branches of two banks in Harare in December when their machines ran out of cash. "The facility is intended to alleviate the liquidity challenges in order to promote the proper function of the economy of Zimbabwe and the stability of the financial markets," Finance Minister Patrick Chinamasa said. Zimbabwe's economy has been on a downturn for more than a decade with firms operating below capacity because of lack of capital, high unemployment and dilapidated road and rail networks.