The International Trade Centre (ITC) has partnered with the African Training
and Management Services (ATMS) project implemented by the African Management
Services Company (AMSCO) to provide technical assistance to improve access to
finance for small and medium-sized enterprises (SMEs) in Zambia.
AMSCO’s
CEO and Managing Director Paul Malherbe said, ‘This initiative is in line with
AMSCO’s mandate to assist African enterprises in becoming competitive and
sustainable.’
One hundred SMEs, drawn from those that have strong export potential
or a significant impact on the economy, will receive support and training to
improve their financial capabilities. This programme also
aims to enhance the capacities of both financial and non-financial service
providers to offer appropriate services to a previously underserved and mainly
indigenous SME sector.
Enhancing
capacities of SMEs, as well as improving their access to finance contributes to
wealth, job creation and economic diversification. However, in Zambia SMEs are
perceived to have high credit risk and banks are wary of lending to them.
‘ITC recognizes the difficulties encountered by SMEs, and has launched
several practical initiatives to bridge the knowledge gap between SMEs and
financial institutions,’ said ITC Executive Director Patricia R. Francis.
As part
of its contribution to implementing the Joint Assistance Strategy for Zambia, the
African Development Bank (AfDB) will identify suitable projects in
manufacturing, tourism, agro-business, construction and the financial sector. They
have proposed a project that will include financial and technical assistance to
critical stakeholders in Zambia.
The
financial assistance component comprises a partial credit guarantee facility
and lines of credit to two local Zambian banks – Investrust
and Zanaco – which have both approached
AfDB for help in meeting SME financing needs.
Business development service providers will receive assistance to
enhance their capacity to provide support to SMEs for the development of
bankable proposals and coaching before, during and after the loan application. The
project will help financial service providers to better assess the risks and future
potential of SMEs through ITC’s risk assessment and risk management software,
LoanCom, which enhances the quality of loans, improves access to finance and
mitigates the risk usually associated with SME lending.
This
programme builds on Zambia’s draft micro, small and medium-sized policy and the
Zambia Decent Work Country Programme. These reforms and policy actions will
facilitate investment in Zambia’s private sector including the SME sector. It
is aligned with Zambia's Vision 2030 and with the Fifth National Development
Plan towards broad-based wealth and job creation through citizenry
participation and technological advancement.
The technical assistance component, coordinated
by ATMS/AMSCO and delivered by ITC and the International Labour Organization (ILO),
is for participating banks and their staff. In addition, core business development
service providers and sectoral business associations, as well as SME and micro-enterprise
managers, will benefit from this project.
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