Development finance institutions from the United Kingdom and Sweden have partnered with Zambia’s National Pension Scheme Authority (NAPSA) to launch a new investment platform aimed at supporting Small and Medium-sized Enterprises (SMEs) in the southern African country. The initiative is backed by an initial capital of $70 million.
According to Bloomberg, the platform, called Growth Investment Partners Zambia (GIP Zambia), was officially launched this Tuesday (15th) in Lusaka, the nation’s capital. The fund includes $37.5 million from British International Investment (BII), $17.5 million from NAPSA, and $15 million from Swedfund, Sweden’s development finance institution.
During the launch ceremony, Zambian President Hakainde Hichilema highlighted the importance of the sector:
“When we look at large economies, we see the strength of SMEs. We are working to develop ours, and this segment cannot be ignored. It is extremely important for growth and job creation.”
GIP Zambia is expected to invest more than $300 million in 150 SMEs over the next 15 years, according to a joint statement by BII, Swedfund, and NAPSA.
“The SME sector in Zambia has significant potential to drive inclusive growth and create job opportunities, but access to adequate financing remains a challenge,” noted Leslie Maasdorp, CEO of BII.
Currently, SMEs account for over 70% of the country’s GDP and 88% of employment. However, more than 40% of these businesses have reported difficulties in accessing the capital needed to scale operations and support growth, BII stated.
Source: DE
