AfDB and Zambia National Commercial Bank Sign Line of Credit Agreement
The AfDB on Wednesday, February 10, 2010, signed a USD 10 million line of credit agreement with the Zambia National Commercial Bank (ZANACO). The signing ceremony took place at the Bank’s field office in Lusaka, Zambia. The Zambia Field Office Resident Representative, Freddie Kwesiga, signed for the Bank while the ZANACO Managing Director, Mark Wiessing, signed for his institution.
ZANACO is a majority Zambian-owned bank which was privatized three years ago and it is currently controlled by Rabobank of the Netherlands. The line of credit is aimed at providing long-term financing to Small and Medium Enterprises (SMEs) to enhance their access to finance on more favorable terms and conditions. It also aims at providing a partial credit guarantee facility to ZANACO plc. It is targeted at SMEs in a number of sectors, including mining, manufacturing, agriculture and agri-business, tourism and information technology.
Speaking during the event, Mr. Kwesiga said he hoped the line of credit would reach its intended target and extend the facility to the non-traditional and under-served SMEs, which include women and the youth, as well as contributing to efforts at creating jobs, thereby reducing poverty. He also expressed satisfaction with AfDB’s collaboration with USAID which will guarantee US$ 0.5 million while the Bank guarantees US$ 2 million to a ten-year non-revolving 50% partial credit guarantee facility to ZANACO.
Speaking after the signing, Mr. Wiessing said that ZANACO already had over 20,000 SME customers and had created an SME division to cater to this sector. He expressed his gratitude to the AfDB for extending the line of credit which will enable ZANACO assist the SMEs, in particular, including those in agriculture with their financing requirements in US dollars. He further thanked the AfDB for its confidence in ZANACO and for opening its doors to the African private sector when many other international lending institutions closed theirs, especially at the peak of the global financial crisis.