FNB Zambia has signed a landmark Memorandum of Understanding (MoU) with the Zambia Credit Guarantee Scheme (ZCGS), launching a Multimillion initiative to significantly improve access to finance for Micro, Small, and Medium Enterprises (MSMEs) across the country.
According to FNB Zambia Chief Executive Officer, Kapumpe Chola, the partnership is designed to address a critical barrier to MSMEs growth.
Speaking at the official signing ceremony, attended by the Zambian Business Times-ZBT, FNB Zambia, CEO Kapumpe Chola stated that the partnership embodies a shared vision to unlock the potential of Zambia’s MSMEs noting that MSMEs are the backbone of this country’s economy, representing a great source of employment and contributing significantly to the GDP.
Chola explained that the agreement aligns with FNB’s “shared prosperity” strategy, which aims to ensure that the bank grows in tandem with its clients and the broader community.
“This partnership is part of our solution to enable and grow the MSME sector,” she added, noting that FNB already leads in lending to MSMEs, serving approximately 19,000 clients through credit services that do not require collateral.
She noted that ZCGS will provide partial guarantees covering 50% of net losses on qualifying MSME loans. “This structure will significantly reduce the risk for the Bank, enabling it to lend to businesses that would ordinarily be deemed ineligible due to credit risk considerations.
Chola highlighted FNB’s existing commitment to the sector, noting that the bank already serves 19,000 MSME clients and provides credit services without requiring collateral. She added that the new partnership will build on this foundation, allowing FNB to roll out new value propositions and initiatives aimed at enabling and growing the MSME sector.
Speaking at the same event, ZCGS, CEO Mary Mumba extended her gratitude to FNB, saying the agreement is a “direct response” to the challenge of limited collateral. “This partnership demonstrates how targeted market interventions can remedy market failures, stimulate economic growth, and drive job creation,” she said.
Mumba anticipates the initiative will not only strengthen financial inclusion but also foster a stronger culture of entrepreneurship, particularly among youth and women-led businesses.
She added that the agreement will stimulate local production and create jobs across various sectors, including agriculture, tourism, and more.
Chisenga Lufungulo, ZCGS Head of Business Development & Strategy, confirmed that the initial K100 million deal, with a K50 million guarantee from the Scheme, will be available to all productive sectors of the economy.
Both organizations further stressed that this is just the beginning of their concerted efforts to lay a stronger foundation for MSMEs and promote sustainable, inclusive economic growth in Zambia.
