Zimbabwe is using the funds generated from its platinum exports to repay a $400 million loan from the African Export-Import Bank, as the financially strained nation leverages its mineral wealth to establish lines of credit.

The southern African nation’s reliance on its platinum resources to secure borrowing reflects the difficulty Zimbabwe faces in getting loans from international financiers, Bloomberg reported.

In February, the government inked a $400 million loan agreement with Afreximbank for budgetary assistance and the funding of trade-related infrastructure.

The funding agreement comes with a 10.2% interest rate and a six-year maturity period, with the borrowing cost surging to 12.2% if a default occurs. Repayment of the loan involves using 35% of Zimplats’ export proceeds, overseen by the Reserve Bank of Zimbabwe (RBZ).

Source: Business Insider