press releases

USAID, Barclays and Stanbic to Boost Commercial Lending to Small and Medium Enterprises

Lusaka
October 30, 2006

United States Agency for International Development (USAID)/Zambia on October 30 signed a credit enhancement agreement with Stanbic Bank Zambia Limited and Barclays Bank Zambia Plc in support of creditworthy small and medium Zambian enterprises (SMEs). As a result of the agreement, Barclays and Stanbic have committed to increase commercial lending to farmers and agriprocessors, as well as entrepreneurs in the tourism sector.

Other banks are expected to become eligible and may have an opportunity to participate in the facility at a later date. Farmers and agriprocessors include smallholder farmers, and SME consolidators and processors who are targeting export markets. Barclays and Stanbic also expect to increase commercial lending to transportation, shipping, and packaging businesses, as well as equipment dealers and tour operator agencies.

Access to credit has been a significant constraint to economic growth in the past, especially in the rural sector. Increased lending to SMEs will support the Government of Zambia in meeting its objectives to increase economic empowerment in rural areas and to improve the nation’s competitiveness in agriculture, natural resources and tourism. USAID’s economic development focus in Zambia has been on expanding exports and increasing foreign exchange earnings from agribusiness and tourism, thus reducing poverty levels, and reducing the country’s dependence on earnings from mining exports.

The signed credit enhancement agreement has been established in conjunction with the USAID-funded MATEP (Market Access, Trade, and Enabling Policies) and PROFIT (Production, Finance and Technology) programs, which support a number of key agricultural value chains and sub-sectors, including horticulture, coffee, livestock, cotton, honey, paprika, maize, cassava, and tourism.

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