Investment firms BII and Swedfund have formed a new venture aimed at providing financing for small and medium-sized enterprises in Zambia.
In a significant move for the Zambian economy, Growth Investment Partners Zambia (GIP Zambia) has been launched with an initial funding of $70 million. The investment company, a collaborative effort between British International Investment (BII), Swedfund, and Zambia’s National Pension Scheme Authority (NAPSA), aims to support Small and Medium Enterprises (SMEs) in Zambia by providing long-term, flexible capital primarily in local currency.
This initiative is more than just an investment for NAPSA, according to Shipango Muteto, chair of NAPSA's board. He described the launch of GIP Zambia as a significant milestone, stating that it directly contributes to growing their membership base, thereby strengthening the long-term sustainability of the pension fund and securing the future of its members.
Musonda Chipalo, who has spent much of his career working in finance at the International Finance Corporation, heads GIP Ghana and will lead the Zambian operation. He emphasised that GIP Zambia's strategy focuses on offering capital tailored to SMEs' needs, which are often underserved by traditional banks, facilitating business growth, job creation, and making SMEs more attractive to investors.
By providing local currency finance, GIP Zambia helps reduce currency risk for SMEs and fosters a more sustainable financing environment. The initiative aligns with Zambia’s Vision 2030 for private sector growth and job creation, leveraging both local and international institutional investment to catalyse broader economic development.
GIP Zambia plans to deploy more than $300 million over the next 15 years to support approximately 150 SMEs. Key economic sectors to be prioritized include manufacturing, agriculture, and financial services. There will be a strong focus on inclusive business ownership, notably support for women and locally owned and led firms.
The strategy of GIP Zambia builds on a successful model launched in Ghana, demonstrating scalability and a replicable approach to SME financing across Africa. It aims to transform SME financing by bridging the continent’s estimated $330–$421 billion SME financing gap, enhancing SMEs' readiness and capacity for expansion and sustainable growth.
Leslie Maasdorp, CEO of BII, stated that GIP Zambia was built on the DFI's experience of launching GIP Ghana and reflects a long-term commitment to building local financing ecosystems for SMEs and entrepreneurs.
SMEs that contribute to job creation with annual revenues and assets between $100,000 and $15 million, and financing needs of $500,000 to $5 million, are eligible for funding from GIP Zambia. BII contributed $37.5 million, Swedfund committed $15 million, and NAPSA provided $17.5 million to GIP Zambia.
This initiative is expected to play a crucial role in supporting the Zambian government's long-term development goals that prioritise private sector development, job creation, and economic diversification.
- The launch of GIP Zambia, with an initial funding of $70 million, is more than just an investment for NAPSA, as it contributes to growing their membership base and securing the future of its members.
- GIP Zambia's strategy focuses on offering capital tailored to SMEs' needs, which are often underserved by traditional banks, facilitating business growth, job creation, and making SMEs more attractive to investors.
- By providing local currency finance, GIP Zambia helps reduce currency risk for SMEs and fosters a more sustainable financing environment, aligning with Zambia's Vision 2030 for private sector growth and job creation.
- GIP Zambia plans to transform SME financing by bridging the continent’s estimated $330–$421 billion SME financing gap, enhancing SMEs' readiness and capacity for expansion and sustainable growth.
- This initiative, supported by development finance institutions like BII, Swedfund, and NAPSA, targets SMEs contributing to job creation with annual revenues and assets between $100,000 and $15 million, and financing needs of $500,000 to $5 million.
