The European Investment Bank (EIB Global), the banking arm of the European
Union, has to date invested EUR 1.2 billion in more than 50 projects in Zambia spanning both the public and private sector. The international bank is looking to increase mutually beneficial partnerships with countries across Africa through its investments.
EIB Global has reaffirmed its dedication to enhancing access to finance for
Zambia’s agricultural small and medium enterprises (SMEs) and farmers.
This renewed commitment comes through strategic partnerships with
leading local banks under the Zambia Agriculture Value Chain Facility
(ZAVCF).
During a media briefing attended by the Zambian Business Times (ZBT),
it was disclosed that EIB Global and the EU has identified agriculture as a sector with immense potential to propel Zambia’s economic transformation. Zambia has good arable land, good climate and available workforce working in its favour. However, despite contributing around 80% of the nation’s agricultural production,
smallholder farmers continue to face substantial barriers to accessing affordable financing, hindering growth in the sector.
To address these challenges, the European Union and EIB Global have joined
forces with Zambian banks to close longstanding private sector financing
gaps in agricultural value chains Themed “Together, we are Partners in Change!”, the partnership between EIB Global and local banks is already bearing fruit.
Through an intermediated lending framework, EIB Global provides credit lines to Zambian banks that in turn identify the best farmers and SMEs to on-lend to. The local banks possess deep local market knowledge, ensuring that financing reaches those who need it most. The credit lines provided are at better terms than what is mostly available in the local commercial market esp because of long maturity rates and infusion of grants into the financing that then makes the loans much more affordable to repay.
The EU also provides a guarantee or Risk Sharing Facility (RSF) to complement the credit lines offered to the financial intermediary banks and is intended to benefit private sector companies operating in the agri-food sector in Zambia. This RSF aims to reduce credit risk for financial intermediaries and will increase the banks’ capacity to extend its financing to riskier or smaller companies. It will enable the banks to offer loans on more attractive terms and incentivise banks to increase access to finance for clients with limited collateral and attract other investors.
The project also comes with technical assistance (TA) and capacity-building initiatives. “TA is delivered to banks to help set up robust agricultural risk management policies, expanding lending to this critical sector that is deemed riskier. Additionally, the TA targets beneficiary farmers, equipping them with skills to improve farming practices, commercialize operations, adopt environmental and social best practices, and enhance sustainability.”
ZAVCF is a cornerstone initiative aligned with Zambia’s national development vision of becoming a prosperous middle-income nation by 2030. The facility aims to create an efficient, competitive, sustainable, and export-driven agricultural sector that
guarantees food security and boosts incomes for agricultural practitioners.
This project ties into the EU’s Global Gateway strategy which seeks to invest in sustainable agricultural transformation to enhance food security and boost rural economies.
The needs of Zambia’s agricultural sector are immense and the public sector alone cannot provide all the capital required. By de-risking investments and mobilising private sector involvement, EIB Global helps crowd in alternative financing for the benefit of agri-businesses.
The programme specifically targets business-oriented smallholder farmers, supporting their transition from subsistence to diversified, market-oriented, and climate-resilient agriculture. It encourages inclusive value chains, linking entrepreneurial farmers, including fish farmers, to private enterprises and service providers, thereby improving access to inputs, finance, markets, and extension services.
Collaboration with EIB Global through ZAVCF reduces risk and enhances the capacity of local banks to finance agribusiness SMEs. Key partnerships include those with ZANACO, First Capital Bank, and Zambia Industrial Commercial Bank.
She noted that since 2021, these collaborations have mobilized
substantial investments, including a EUR 15 million credit line with
ZANACO and a USD 10 million facility with First Capital Bank, both matched
by the respective banks. “In 2025, a EUR 15 million credit agreement was signed
with Zambia Industrial Commercial Bank to further expand access to
finance in the sector. All the respective banks also commit to match the investment by EIB Global so that the total capital injection to agriculture doubles.
EIB Global maintains that empowering SMEs and connecting smallholder
farmers to markets are crucial steps in fostering economic progress, creating jobs and promoting sustainable agricultural development in Zambia.
