Swedish investment companies BII and Swedfund establish enterprise for funding Small and Medium Enterprises in Zambia
Growth Investment Partners Zambia (GIP Zambia) has been launched to address the significant financing gap faced by small and medium-sized enterprises (SMEs) in Zambia, providing them with long-term, flexible, local currency capital and strategic business support. The aim is to help SMEs expand their operations, create jobs, and contribute to Zambia's inclusive economic development and private sector growth.
The investment company, with an initial anchor commitment of US$70 million from founding partners British International Investment (BII), National Pension Scheme Authority (NAPSA), and Swedfund International, plans to invest over $300 million in approximately 150 SMEs over the next 15 years.
GIP Zambia targets SMEs with annual revenues or assets between $100,000 and $15 million, offering financing solutions with longer repayment periods, reduced collateral requirements, tailored business support, and risk-sharing mechanisms. Priority sectors include manufacturing, agriculture, and financial services, with an emphasis on locally owned and women-led businesses.
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.
Shipango Muteto, chair of NAPSA's board, described the launch of GIP Zambia as a significant milestone for the pension fund, channeling much-needed patient capital into SMEs, which form the backbone of the economy. Leslie Maasdorp, CEO of BII, stated that GIP Zambia is built on the DFI's experience of launching GIP Ghana and reflects its long-term commitment to building local financing ecosystems for SMEs and entrepreneurs.
The impact of GIP Zambia is expected to be substantial, fostering a scalable and sustainable ecosystem for SME growth, thereby stimulating economic diversification, job creation, and overall economic transformation in Zambia. The launch event was attended by Zambian president Hakainde Hichilema and officials from the organizations involved.
GIP Zambia's launch marks the expansion of the GIP model across Africa, following the successful launch of GIP Ghana in 2023. By bridging financing gaps and providing comprehensive business support, GIP Zambia aims to make SMEs more attractive for investors from traditional capital markets, helping to create jobs and drive economic growth in Zambia.
[1] Vision 2030 and 8th National Development Plan, Government of the Republic of Zambia [2] British International Investment (BII) Press Release, Growth Investment Partners Zambia Launches to Boost SME Financing and Economic Growth, [Date]
- Growth Investment Partners Zambia's primary objective is to fill the financing gap for small and medium-sized enterprises (SMEs), providing them with long-term capital and strategic support to expand, create jobs, and contribute to Zambia's economic development.
- Recognizing the importance of investing in SMEs, NAPSA has committed to channelling patience capital into GIP Zambia, which they view as an imperative for growing their membership base and ensuring long-term sustainability for its members.
- By targeting locally owned and women-led businesses in sectors like manufacturing, agriculture, and financial services, GIP Zambia intends to make affordable housing, development finance, and private equity more accessible for SMEs, stimulating real-estate growth and economic transformation in Zambia.
- In the long run, the impact of GIP Zambia is expected to go beyond SMEs, fostering a scalable and sustainable ecosystem that leads to economic diversification, job creation, and overall economic transformation, converging with the goals outlined in Vision 2030 and the 8th National Development Plan of the Republic of Zambia.
