Investment duo, Business Intelligence International (BII) and Swedfund, establish a business for funding Small and Medium Enterprises (SMEs) in Zambia.

Growth Investment Partners Zambia Launches to Boost Small Businesses

Growth Investment Partners Zambia (GIP Zambia) has been launched with an initial funding of $70 million, aiming to provide long-term, flexible, local currency finance to small and medium-sized enterprises (SMEs) in Zambia. This investment platform is a significant milestone for the Zambian economy, as it aims to address the financing gap that these businesses face for growth and expansion.

Shipango Muteto, chair of the National Pension Scheme Authority's (NAPSA) board, described the launch of GIP Zambia as a significant milestone. The investment channels much-needed patient capital into SMEs, which form the backbone of the Zambian economy, contributing approximately 70-80% of the country’s GDP and employing 88% of its workforce.

GIP Zambia's purpose is to support around 150 SMEs across various sectors, including manufacturing, agriculture, and financial services. The investment company aims to enhance SME readiness and attractiveness for further investment by providing tailored business support, aiming to improve sustainability and growth prospects of these enterprises.

The investment comes from British International Investment (BII), Swedfund, and NAPSA. BII contributed $37.5 million, Swedfund committed $15 million, and NAPSA provided $17.5 million for GIP Zambia. The company has built on a template developed in Ghana, where GIP Ghana was launched in 2023 to provide SME financing by a partnership of BII and local partners.

Leslie Maasdorp, the CEO of BII, stated that GIP Zambia was built on the DFI's experience of launching GIP Ghana. Maasdorp expressed that GIP Zambia reflects BII's long-term commitment to building local financing ecosystems for SMEs and entrepreneurs.

GIP Zambia offers patient capital featuring longer tenors, reduced collateral requirements, flexible repayment terms, and risk-sharing mechanisms that traditional banks generally do not provide. This will help close the SME financing gap in Zambia, promoting inclusive economic development and unlocking the untapped potential of Zambian SMEs.

The company will provide financing to SMEs with annual revenues and assets between $100,000 and $15 million, and financing needs of $500,000 to $5 million. There will be a strong focus on inclusive business ownership, notably support for women and locally owned and led firms.

Muteto further emphasized that this investment is an imperative for NAPSA, contributing to growing their membership base and strengthening the long-term sustainability of the pension fund. The launch of GIP Zambia was also described as a significant event by Muteto, as it secures the future of NAPSA's members.

GIP Zambia is expected to deploy more than $300 million to 150 SMEs over the next 15 years, with a focus on key economic sectors such as manufacturing, agriculture, and financial services. This transformative investment platform serves to overcome structural lending challenges and support the growth and expansion of SMEs in Zambia, ultimately contributing to the country's economic development and job creation.

Blended finance and private equity are combined in GIP Zambia's approach, offering long-term, adaptable financing solutions for local currency to small and medium-sized enterprises (SMEs).
The Zambian economy benefits from this investment, as it targets the financing gap that hinders SME growth and expansion.
SMEs in manufacturing, agriculture, and financial services are the primary focus of GIP Zambia's support, with tailored business assistance provided to enhance their attractiveness for further investment.
British International Investment (BII), Swedfund, and the National Pension Scheme Authority (NAPSA) have collectively contributed $70 million to launch GIP Zambia.
BII's experience with GIP Ghana, which was launched in 2023, formed the basis for GIP Zambia's development.
GIP Zambia offers patient capital, providing longer tenors, reduced collateral requirements, flexible repayment terms, and risk-sharing mechanisms that traditional banks often lack.
The investment targets SMEs with annual revenues and assets between $100,000 and $15 million, and financing needs ranging from $500,000 to $5 million.
GIP Zambia's focus includes inclusive business ownership, particularly supporting women and locally owned and led firms.
NAPSA considers this investment critical for expanding their membership base and ensuring the long-term sustainability of the pension fund.
Over the next 15 years, GIP Zambia aims to deploy more than $300 million to 150 SMEs, mainly in key economic sectors like manufacturing, agriculture, and financial services.
This investment platform helps address structural lending challenges and encourages the growth and expansion of SMEs in Zambia, fostering economic development and job creation.
In terms of personal finance and career development, this investment boosts the prospects of job-seekers, as it generates opportunities with various SMEs.
As part of the data-and-cloud-computing sector, GIP Zambia may leverage technology to improve the efficiency and transparency of its operations and SME partner's businesses.
Sustainable living is promoted through the growth of SMEs in sectors like agriculture and manufacturing, and education-and-self-development could see an improvement in skills training programs offered by these businesses.

Investment duo, Business Intelligence International (BII) and Swedfund, establish a business for funding Small and Medium Enterprises (SMEs) in Zambia.