The Reserve Bank of Zimbabwe (RBZ) says the country’s private sector borrowed a record US$3,53 billion from foreign banks and financial institutions in 2025, a 43 percent jump from the US$2,46 billion secured in 2024, as businesses increasingly look beyond the country’s borders for more affordable and accessible credit.
This comes amid persistent divergence between the cost of local borrowing and the competitive terms available from offshore lenders.
Since September 2024, the central bank has maintained its Bank Policy Rate at 35 percent, a deliberately tight monetary stance designed to arrest inflation and shore up the ZiG currency.
The policy worked as annual ZiG inflation fell from a peak of 95,8 percent in July 2025 to 4,1 percent by January 2026, the country’s first single-digit reading in over three decades.
But the remedy has come at a cost for borrowers. Minimum deposit rates for ZiG accounts sit at just five percent for savings and 7,5 percent for time deposits, while actual commercial lending rates tracked by the RBZ run considerably higher, placing domestic credit well out of reach for many firms seeking large-scale investment finance.
Against that backdrop, the appeal of offshore credit is clear. According to the Reserve Bank, foreign loan facilities offer “competitive terms and interest rates,” supporting employment creation and growth across key sectors.
Agriculture emerged as the largest recipient of offshore financing, absorbing 37,1 percent of all foreign loans in 2025, with mining a distant second at 22,8 percent, followed by manufacturing at 15,6 percent.
Within agriculture, tobacco continues to anchor foreign merchant financing. Zimbabwe remains one of the world’s leading flue-cured tobacco producers, and the crop’s established global supply chains have long made it a natural candidate for offshore trade finance.
But the sector’s borrowing base is broadening. Horticulture, a younger but rapidly expanding segment of Zimbabwe’s agricultural economy, is attracting increasing flows of foreign capital as exporters scale up production for regional and European markets.
The offshore lending boom is unfolding alongside steady, if modest, growth in domestic banking.
Aggregate gross loans and advances from Zimbabwe’s banking sector grew by roughly 35 percent in 2025, reaching ZiG75,59 billion by December, up from ZiG55,93 billion a year earlier.
Foreign currency-denominated loans accounted for 89,63 percent of that total, a sign that even within the domestic banking sector, US dollar credit remains the dominant form of business finance. Some 74,82 percent of local bank loans were directed towards productive sectors, suggesting broadly aligned priorities between domestic and offshore lenders.
The RBZ is aware of the monetary policy dynamics at play. In its latest statement, it confirmed it will maintain the 35 percent policy rate for now, noting that the economy is “in the early stages of a low and delicate inflation environment” after more than three decades of chronic instability.
Rate cuts, when they come, will be “data-dependent” and “gradual and cautious” language that signals borrowers should not expect rapid domestic rate relief.