Government, through the Ministry of Finance and Economic Development, has issued a guarantee for Commercial Bank of Zimbabwe’s (CBZ) ZWL10 million loan to Victoria Falls based Mbano Manor hotels.
This development follows the ZWL500 million bank guarantee facility issued by the government last year in May to tourism players as stimulus to help them recover from the impacts of Covid 19.
Minister of Finance and Economic Development, Mthuli Ncube issued this guarantee in terms of Section 300(3) of Constitution of Zimbabwe as read with section 20(1) of the Public Debt Management.
A gazette in the constitution of Zimbabwe reads that the government has issued a guarantee binding the Government of Zimbabwe as surety for the repayment of ZWL10 million (50% of the Facility) to the Mbano Manor Hotel from CBZ.
“Should there be any outstanding amounts due to Lender at the of maturity of the guarantee, the guarantor undertakes to make the full payment of all amounts payable by the guarantor in terms of this guarantee upon demand from the Lender within thirty (30) calendar days.
“The guarantee shall remain valid until amounts due under the terms and conditions the terms and conditions of the Facility are paid up,” reads the gazette.
A guaranteed loan is a loan that a third party guarantees or assumes the debt obligation for in the event that the borrower defaults. Sometimes, a guaranteed loan is guaranteed by a government agency, which will purchase the debt from the lending financial institution and take on responsibility for the loan.
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