Zimnat makes it easier for businesses to obtain funding

As Zimbabwe maps its way towards economic recovery and realising a better balance of payments, export development initiatives have become a priority for both the government and private sector.

Zimnat is on an innovation drive to develop insurance products that can assist businesses which have for a long time struggled to grow their manufacturing base and export markets.

With the new products it has introduced, Zimnat hopes to obviate some of the obstacles to development that result from a lack of funding and working capital.

Businesses operating in any struggling economy are exposed to the harsh reality of limited access to funding. In such fluid environments risk mitigation measures take precedence among investors and banks.

This desire to reduce risk usually outweighs the appetite for profits when it comes to lending, making it difficult for businesses to obtain the necessary funding for the capacitation required to meet the demand for exports.

In developed nations the government gives export credit agencies the task of supporting the development of exports through the provision of export financing and various insurance policies and guarantees.

Zimnat, although it is a private financial services player, has taken upon itself the task of strengthening the export position of domestic companies by providing insurance, guarantees and partnerships with various funders.  This is in line with Zimnat’s commitment to making life better for all its stakeholders, both individuals and legal entities. The foreign currency constraints in Zimbabwe are leaving many businesses with the difficult task of sourcing funds to pay for their foreign currency obligations in settling input costs.

Through its Trade Credit Insurance Division, Zimnat is helping businesses enter into more foreign markets, which it would normally be difficult or risky to venture into. As an organisation that is associated with Africa’s largest non-banking financial services provider, Sanlam, Zimnat has a rich market intelligence pool on global markets that can help any business overcome the fear of payment defaults on exports.

Furthermore Zimnat offers export trade credit insurance policies that compensate businesses in the event that the producer’s clients, whether local or international, default on payment for goods sold on credit terms.

The goal of any business in any difficult environment is cost containment. Zimnat Trade Credit Insurance policies do not just compensate businesses in the event of a default by their debtors, the policies also offer cost minimisation through reduction of bad debt reserves.

The policy allows the exporting business to share the cost of market vetting with Zimnat to ensure that the business minimises its costs and is cost competitive internationally. Zimnat also eliminates the need for hiring lawyers or debt collectors in the event of a default by a debtor, as it takes over the credit management and debt collection function at no extra cost.

With the aid of partners with strong financial backing, Zimnat is able to provided comfort to trade financiers by making available invoice-discounting arrangements, also known as factoring.

Such arrangements make life better for Zimbabwean businesses which have low credit ratings that make it difficult to access funds from banks.

Businesses are able to turn what would have otherwise been a credit sale into a cash-upfront sale through invoice discounting.

A business can wait for 30 days on a credit sale and risk the loss of value through inflation on a sale made. It can receive cash up front by opting to have its invoices discounted by Zimnat. Through the trade credit insurance Zimnat has essentially made it easier for business to obtain the funding necessary for restocking. The insurance policy will essentially cover the financier from the risk of losing money when a debtor defaults on payment after the 30 days or the terms of the invoice have ended.

As lending standards become increasingly tighter due to an increase in non-performing loans, Zimnat is encouraging private lenders to provide funding for small, medium and large businesses through the issuance of various credit guarantees.

Zimnat will guarantee repayment of borrowed amounts if the borrowing business defaults on payment. Businesses without a credit history or collateral are able to secure funding using guarantees provided by Zimnat. Other guarantees issued by Zimnat have also made it possible for businesses, particularly in manufacturing, agriculture, construction and mining, to upgrade their equipment, machinery and infrastructure.

Zimnat is mandated by its vision of making life better to strengthen the competitive position of local companies and make the lives of business people better.

Contact us today on our toll free number 08080063/4/6. Alternatively you can send us an email on [email protected]; Visit our website www.zimnat.co.zw; https://www.facebook.com/Zimnat/; https://twitter.com/zimnatofficial; https://zw.linkedin.com/company/zimnat   for a quote.