Friday, October 24, 2008

(DAILY MAIL) Two sign $100 million SME deal

Two sign $100 million SME deal
Thursday, October 23, 2008

THE United States Agency for International Development (USAID) and African Banking Corporation Zambia Limited (ABC) have signed a US$100 million credit agreement to enable small and medium-sized enterprises (SME) access loans over a five-year period. This credit enhancement pact would offer new loan opportunities to the SMEs, according to a statement released by the American Embassy yesterday.

The statement said it had been difficult for small-scale businesses and would-be entrepreneurs to get credit in Zambia. It said the Americans would help small-scale Zambian firms to enhance working capital under favourable credit terms. Under the agreement, the US Government would assume 50 per cent of the risk.

It also said the ABC was working to expand into retail lending and open a number of branches over the next two years.

The statement said the US government guaranteed programme would help the bank to expand lending to small-scale Zambian businesses by as much as US$100 million over five years. The agreement is a part of the US government’s commitment to economic empowerment.

The statement says by working with Zambian banks the US intended to help improve Zambia’s competitiveness in agriculture, natural resources and tourism.

It also said small-scale business would be able to expand through greater credit access, adding that this would enhance revenue, bolster tax receipts and fuel economic growth.

USAID mission director, Melissa Williams, said credit was the lifeblood of business.

“These loans will give small-scale businesses the boost they need to grow, thereby creating more jobs for Zambians. Economic growth is key to reducing poverty and is a priority for the American partnership with the Zambian people,” she said.

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