BancABC bid bonds uptake rise
By Taurai Mangudhla
Financial services group, BancABC has experienced an increased uptake of its bid bonds mostly by the small to medium enterprises in the construction second in the second half of 2017, managing director Joe Sibanda has said.
A bid bond is a debt secured by a bidder for a construction job, or similar type of bid-based selection process, for the purpose of providing a guarantee to the project owner that the bidder will take on the job if selected.
Since BancABC introduced the product last year, more than 140 clients benefited during the second half of the year
“The bank has issued out more than 140 bid bonds over-the-counter to SMEs during the second half of 2017,” said Mr Sibanda.
“We is expect that more companies will approach us for the bid bonds after our presentation to the construction sector during the 2017 Construction Industries Federation of Zimbabwe annual general meeting and congress held from 24 to 26 of August 2017, which improved the product awareness to the market.
“The product has had an increased uptake particularly from the construction sector. This has come as a result of continuous engagement with the construction industry that is considered a growth sector in the country.”
The bid bonds are part of Banc ABC’s initiatives to local contractors aimed at promoting infrastructure projects. The move is driven by the need to fund the construction industry, which plays a critical role in the economy.
“It is an over the counter product that is available to any of our customers from any of our BancABC branches countrywide. The customer or contractor only needs to approach their branch with their request and a suitable risk mitigant and evidence of proven performance in the sphere for which a bid bond is required.
“Should the customer’s submission meet the bank’s requirements, the bid bond will be made available in a matter of hours. The terms are specific to each individual application based on the risk assessment of each application,” the bank said.
BancABC also issues performance guarantees and advance payment guarantees to the construction industry. This adds to the bank’s asset finance, term loans and property finance initiatives. The Herald