The Development Bank of Zambia (DBZ) has set aside USD30m for lending to Small and Medium Size Enterprises (SMEs) in the country.
The loans mean to create stable employment, empower citizens, develop infrastructure, and contribute to Zambia’s economic growth.
Funds come from a USD30m concessional loan awarded in October 2015 to DBZ by its peer China Development Bank.
Companies within the agricultural, mining and manufacturing sectors are eligible to access those funds through loans, DBZ’s Director General Jacob Lushinga explained.
Another metric to assign the loans requires companies to be able to cover a cash collateral equivalent to 20% of the loan, DBZ’s Stakeholder Relations Officer Kaputo Liyani disclosed.
Moreover, the loans shall be for a minimum of ZMW1m (USD192) and only projects that are financially viable with a minimum yield of return can apply for them, Liyani added.
Up to 50 projects will be benefited but the government will keep addressing efforts to support SMEs on job creation across the country according to the DBZ.
A reviewing of policies is necessary to encourage commercial banks to bet for the SMEs that play an important role in the economy of Zambia according to the Chinese Embassy to Zambia.
SMEs merely represent 18% of total outstanding loans from commercial banks even though they represent 70% of the economy and 88% of local employment.
The DBZ was established in 1972 as a joint venture between Public and Private local sectors with foreign institutions to ease access to capital for private investment growth, productivity, wealth, and employment creation.