Investment organization BII and Swedfund establish company to fund small and medium enterprises in Zambia
Growth Investment Partners Zambia (GIP Zambia), a new investment company, has been established to provide long-term, patient, and flexible capital primarily in local currency to small and medium-sized enterprises (SMEs) in Zambia. The mission of GIP Zambia is to address the critical financing gap that constrains SME growth and support businesses that are crucial to Zambia’s economy, enabling them to scale, create jobs, and foster inclusive business ownership, particularly for women and locally led enterprises.
The company aims to deploy over $300 million to 150 SMEs over the next 15 years. This financing is designed not only to fuel growth but also to prepare SMEs for investment by traditional capital markets. The initiative aligns with Zambia’s Vision 2030 and the 8th National Development Plan, which prioritize private sector development, job creation, and economic diversification.
The focus sectors for GIP Zambia include manufacturing, agriculture, and financial services. These sectors are targeted for their roles in driving economic growth and are areas where GIP Zambia expects to have significant impact, particularly emphasizing inclusive business models and local leadership.
In addition to capital provision, GIP Zambia also offers strategic business support, helping SMEs expand, create jobs, and strengthen their operational capacities. The company is positioned as an institution with a long-term horizon, not a typical finite-life fund, and is backed by experienced investors like British International Investment (BII), Swedfund, and Zambia’s National Pension Scheme Authority (NAPSA).
For NAPSA, the investment in GIP Zambia is not just an investment, but an imperative that directly contributes to growing their membership base, thereby strengthening the long-term sustainability of the pension fund and securing the future of its members. According to Shipango Muteto, chair of NAPSA's board, the launch of GIP Zambia is a significant milestone for the pension fund that will channel much-needed patient capital into SMEs, which form the backbone of the Zambian economy.
Leslie Maasdorp, CEO of BII, stated that GIP Zambia builds on the DFI’s experience of launching GIP Ghana and reflects its long-term commitment to building local financing ecosystems for SMEs and entrepreneurs. BII contributed $37.5 million, Swedfund committed $15 million, and NAPSA provided $17.5 million for GIP Zambia.
GIP Zambia's approach focuses on providing capital mainly in local currency, offering longer tenors, lower collateral requirements, more flexible repayment arrangements, risk sharing, and more customized business support. This approach aims to make SMEs more attractive for investors and help them grow sustainably.
In summary, GIP Zambia's mission is to provide patient, flexible, local currency capital to Zambian SMEs to fuel long-term growth and support inclusive business ownership. The company's impact is expected to be significant, deploying over $300 million to 150 SMEs over 15 years, catalyzing job creation, enhancing SME investment readiness, and strengthening local economies. The focus sectors for GIP Zambia are manufacturing, agriculture, and financial services.
- GIP Zambia, a new investment company, focuses on deploying over $300 million in local currency to 150 SMEs over the next 15 years, especially those in the sectors of manufacturing, agriculture, and financial services.
- The mission of GIP Zambia is to address the financing gap constraining SME growth, while fostering inclusive business ownership, particularly for women and locally led enterprises.
- GIP Zambia offers not only capital provision but also strategic business support, helping SMEs expand, create jobs, and strengthen their operational capacities.
- The company's approach prioritizes private equity investing, providing patient, flexible capital with lower collateral requirements, flexible repayment arrangements, and risk sharing, aiming to make SMEs more attractive for investors and help them grow sustainably.
