By JUDITH NAMUTOWE? –
PAN African commercial bank, BancABC, has signed a loan deal with the European Investment Bank (EIB) of K200 million to provide capital investment for the private sector in Zambia.
EIB head of Southern African division, Diederick Zambon said during the signing of loan in Lusaka yesterday, the K200million loan-package would be used to provide capital investment for private businesses.
The loan facility would be provided to Micro Small and Medium Enterprises (MSMEs) with a payment plan of between five and eight years.
“It is important to support the Micro Small and Medium Enterprises because we feel that a strong private sector development is the basis for a strong economy and will balance social circulation,” he said.
Mr Zambon said earlier this week, the bank signed a similar amount for Bancabc in Botswana.
Bancabc managing director Clergy Simatyaba said that the deal would catalyze business activities, private sector and subsequently make a significant contribution to the economy.
He said the loan carried a repayment period of eight years, depending on the currency and a grace period of two years on capital payment, before adding that interest rates would also vary from fixed to variable depending on the currency the loan was drawn in.
“The loan is meant to allow businesses access medium-term funding, mainly for the purchase of capital goods. These loans are targeted at assisting such businesses to expand their operations and in the process make a bigger contribution to the economy, including employing?more workers,” Mr Simatyaba said.
Mr Simatyaba said one of the major obstacles facing businesses was the mobilisation of long term financing.
“The bank will not be drawing down the loan in one block from EIB, it shall only be drawn on a need basis once there is a customer that requires financing and whose financing requirement has been approved by the bank. This would mean that the customer would have taken the?customers financing request through its internal credit approval processes,” he said.
EIB vice president responsible for lending in Sub-Saharan Africa, Pim Van Ballekom said the new lending programme with Bancabc would unlock business opportunities by companies across Zambia.
He said this reflected its shared goals of ensuring companies involved in a broad range of sectors operating across the country could access finance to investment in expanded operations, build new facilities and create jobs.