TLG backs Zimbabwean bank with $10m credit line

The frontier Asia and Sub-Saharan Africa specialist private equity firm has provided a term loan to Zimbabwean bank NMB Bank.

TLG Capital has provided a term loan facility of up to $10 million to Zimbabwean lender NMB Bank to support the company’s infrastructure redevelopment.

Merchant bank NMB bank was established in 1992, but only acquired a commercial banking licence in 1999. The bank operates 10 retail branches across Zimbabwe, and offers a range of corporate finance and advisory as well as commercial and retail banking services.

TLG Capital was founded in 2009. In 2012, the private equity firm underwent a restructuring and re-established itself as an investment holding company. TLG provides growth capital to “indigenous companies in Sub-Saharan Africa and Frontier Asia with limited funding.”

TLG’s investment in NMB was at the higher end of its typical investments of between $3 million to $5 million per transaction. The deal was led by TLG partners Isha Doshi, Dominic Clive and David Harnett.

“The loan is specifically tied into specific infrastructure sectors,” Clive told Private Debt Investor. “We did a lot of research on Zimbabwe, and found there to be a lot of unrealised opportunities, particularly in funding SMEs that feed into development infrastructure in the region.”

Doshi believes that investment risk in Zimbabwe has been, and continues to be, mispriced. “The adoption of the dollar in 2009 ended the country’s years of hyper-inflation almost overnight which in turn has catalysed growth,” she argues.

She believes that the recent political stabilisation combined with strong macro fundamentals make Zimbabwe an attractive investment destination with great upside potential. “The financial services sector, as a highly defensible and systemic sector, represents the best opportunity for risk adjusted returns in the current environment,” she said.

The bank has also received backing from Africinvest, FMO and Norfund, each purchasing a minority stake of NMBZ’s shares behind African Century and Old Mutual; more than 45 percent of NMBZ’s shares are now privately held by leading African private equity and development finance investors. NMB has loans from FMO and Norfund and has significantly increased its access to credit lines in the last year.

TLG has provided financing across different capital structures to: Swedish Medical Centre in Ghana, food and drinks supplier Dunkin Donuts in Pakistan, Healthcare Liberian company Snapper Hill, Indian IT firm Re-Cartridge, and South African Agriculture firm Emvest.