The African Development Bank (AfDB) has approved a USD50m line of credit to the Development Bank of Zambia (DBZ) for lending to local Small and Medium Enterprises (SMEs).
This was disclosed during a visit of the AfDB Resident Representative for Zambia Damoni Kitabire to the Zambian Minister of Finance Felix Mutate, on October 19th 2016.
“We are now at the stage of working towards the finalization of agreements which will govern the use of the proceeds strictly for eligible SMEs only,”Kitabire said.
“This concessional facility comes at an opportune time as it exemplifies your rising confidence in our economic governance, and will assist us in strengthening growth areas and reducing unemployment among our people,” Mutate told AfDB’s Representative.
Earlier in 2016, DBZ allocated USD30m for lending to SMEs in the country. These loans mean to create stable employment, empower citizens, develop infrastructure, and contribute to Zambia’s economic growth.
In March 2015, AfDB approved a USD3m line of credit to Madison Finance Company, a financial institution targeting local SMEs in Zambia by offering various financial products and services.
The line of credit aimed to support at least 1,000 SMEs involved in trade, agriculture, construction, manufacturing, hospitality, and services.
SMEs account for 70% of Zambia’s GDP and 88% of the employment, according to a research from the Bank of Zambia (BoZ) and the International Labor Organization (ILO).