Govt shopping for K10.3 billion to finance small businesses —Minister Mubanga

Government is scouting for K10.3 billion to finance entrepreneurs through it’s Citizen Economic Empowerment Commission (CEEC) facility.

In response to this, the Zambia National Commercial Bank (ZANACO) has pledged to set aside K50 million towards the funding.

Currently, the government has K400 million to support entrepreneurs, Small and Medium Enterprises (SMEs) Development Minister Elias Mubanga said.

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“Government has a huge deficit for SME funding. When Government asked SMEs to apply through CEEC, what we found out was that Government needs K10.3 billion to finance the SMEs.

“The government only had about K400 million so we are in icing financial institutions to come and partner with the Government to seal this gap,” he said.

The minister was pleased that a critical player in the private sector, such as ZANACO had partnered with Government to launch the SME Loan Solution.

Small and Medium enterprises Development Minister Elias Mubanga and ZANACO Bank Managing Director Mukwandi Chibesakunda cheers during the official launch of the ZANACO Bank SME loan Solution at InterContinental Hotel in Lusaka on January 31,2023 -Picture by THOMAS NSAMA/ZANIS

Mubanga indicated that the initiative was not only timely but a great opportunity for Micro, Small and Medium Enterprises (MSMEs) to access the highly much needed finance.

“As government, we have no doubt that it will help boost business and create opportunities for the SMEs and cooperative that will bring up job creation and increase SMEs value to the Gross Domestic Product (GDP),” he said.

Mubanga said the government was happy to learn of the relaxed lending rates that would be offered to the businesses, which include the simplification of application documents and collateral requirements.

“It will also offer reduced interest rates for short term business loans and reduced turnaround time. What is also exciting is that the facility comes with training and technical assistance that will be provided to entrepreneurs,” he said.

Mubanga urged MSMEs to take advantage of these opportunities and ensure that they understand the needed requirements to avoid wasting time and getting frustrated unnecessarily.

ZANACO Head Business Banking Austin Chijikwa said the bank was offering a reduced interest rate of 18 percent per annum on short term business loans.

Chijikwa explained that this facilitate would cover invoice discounting, order finance and short term loans of up to 18 months.

“Customers on this facilitate can borrow up to K1 million depending on their capacity to repay and small ticket loans below K250,000 will not require audited financial unless they already available,” he said.

And ZANACO Chief Executive Officer Mukwandi Chibesakunda said the bank had set aside K50 million towards SME development.

Chibesakunda said as the SME pay back the loan the bank would consider increasing the amount in order for more businesses to benefit.

“Honorable Minister you have shared with us that the challenge is K10.3 billion we will take a part of it today so that we demonstrate our commitment we have set aside K50 million for this particular activity and as the SME pay back we will think of increasing that amount,” She said.