The article “National Bank outlines products for minerals sector” featured below was initially published in Malawi’s Mining Review Issue Number 18 2014 that was circulated in November 2014.
For the first time, the full edition can be read here: Mining Review No. 18 November 2014.
To learn more about this quarterly publication, edited by Marcel Chimwala, read the post about the “Voice of the mineral sector in Malawi”.
National Bank outlines products for minerals sector
by Mining Reporter
Malawi’s largest Bank, National Bank of Malawi, says it has on offer a number of products that are tailor made for the corporate world including minerals sector investors.
National Bank’s Senior Manager for the Wholesale Banking Division Gladys Ganda tells Mining Review in an interview that the products that the Bank has on offer include working capital finance, project infrastructure finance, commercial property finance, finance for imports and exports, international trade finance, bonds and guarantees and finance and operating lease facilities.
She says in terms of project infrastructure finance, the Bank provides finances for new and existing businesses such as mining, energy, construction, IT infrastructure projects, transport and manufacturing projects.
The Bank is also positioned to finance projects under Public Private Partnerships (PPPs) either individually or through local and international syndication with local and foreign banks respectively.
Project financing is usually long term with a repayment period of more than 3 years up to a maximum of 10 years, and may be availed in Malawi Kwacha or foreign currency depending on availability and if export oriented. Our lending rates are very competitive and we offer a moratorium of up to 24 months on principal loan repayments for existing businesses carrying out projects. We offer moratorium on both principal and interest for green field projects (Start-ups). The length of the moratorium is dependent on the project’s risk profile and implementation schedule. We require the project sponsor to make a capital contribution to the project as a sign of commitment. This capital contribution varies depending on the risk profile of the project and the sponsor’s financial strength.
Under working capital finance, the Bank provides short term loans, which customers with short term financing needs can access.
Ganda explains that the Bank offers loans in foreign currency to exporting customers that are able to generate foreign proceeds to service their borrowing.
National Bank also offers medium term loans, which are available to enable corporate customers purchase assets whilst matching finance costs to cashflow produced by the investment.
We also offer syndicated loans and in this arrangement NBM is capable of securing funds by involving other financiers either locally or internationally. Large corporate customers, multinationals, international companies, wishing to expand in Malawi can access this facility,
NBM also offers commercial property finance for the acquisition of properties for own occupation or commercial purposes to new and existing businesses.
In this arrangement, Ganda says the customer is required to contribute towards the cost of acquiring the property and the required debt, and equity mix varies with the customer’s risk profile.
She explains that NBM also offers international trade finance which includes Documentary Collection, and Documentary Letters of Credit .
We also provide trade information to our customers including a credit information report which we provide to our importing and exporting customers with banker’s opinion and credit standing of their counter parties both locally and oversea, trade enquiries and letters on introduction,
The Bank also offers bonds and guarantees which include tender bond, performance bond, advance payment guarantee, customs guarantee and retention money guarantee.
The Bank is able to establish other special guarantees upon request, which include bonded warehouse, manufacturers rebate, surtax bond, temporary importation of goods, for re-export, immigration guarantees and shipping guarantees.
Ganda says the Bank provides finance lease facilities including straight finance lease, sale and lease back and operating lease.
She says NBM successfully caters for multinational customers because it is very well placed in the International banking system due to its strong balance sheet.
We have correspondents for all currencies tradable in this market that we deal with and we are able to route such transactions to them,
With information technology at the core of all sectors including mining, Ganda explains that the Bank has the BankNet Online through which its customers can enjoy around- the-clock, fully-fledged and unlimited access to their account from any corner of the globe, as long as they can have access to the Internet.
The Internet banking product also caters for transferring of money online between accounts, viewing account statement, balance enquiry, stop payments and other banking services.
We also have on offer MO 626 service and NBM Visa Branded Cards. Mo626ice is a Mobile Phone Banking system through which you can access various banking services from mobile phone handsets. Mo626ice can be accessed from any mobile phone network in the world as long as the number you are using is registered on the system. You can access the services by dialing *626# on your mobile. With this service you can conduct mobile phone banking for payment of various utility services and transfer of money between accounts,
Ganda explains that as NBM is spread across the country with over 30 service centres, and 80 Auto teller machines, it is ready to serve mining projects which are always located in the rural areas.
In addition, she says, the Bank’s service centre management throughout its network is well equipped to deal with various aspects of customers’ personal and business needs.
Our service centre managers draw support from head office functions with specialist skills and knowhow in credit management, treasury services, international trade, information technology, mortgages, asset finance, and legal aspects of banking, among others, to ensure a well co-ordinated and efficient delivery of innovative products and services. We also have an Electronic funds transfers platform for paying salaries and other services, VISA Point of sale devices used for payment of goods and services in shops and also we offer e-statements which are auto-generated and sent to various customers on a daily, weekly or monthly basis.
Ganda says, in addition to serving corporate customers, NBM has products that are tailor made for artisanal and small scale miners including invoice proceeds financing, which is a short-term financing arrangement extended to small and medium scale enterprises for working capital on the strength of issued invoices.
The Bank also offers SMEs short term and medium term loans and overdrafts, guarantees and letters of credit.