The Board of Directors of the African Development BankGroup
(AfDB) through its private sector window approved on March 2,
2015 US $3 million line of credit (LoC) equivalent in the local
currency (Zambian Kwacha) to Madison Finance Company Ltd.
Madison Finance Company (MFC) is a rapidly growing financial
institution targeting local small and medium enterprises
(SMEs) in Zambia by offering various financial products and
services such as term loans, leasing, invoice discounting and
insurance.
MFC is gradually increasing its SME portfolio share targeting
30% by end 2015, with plans to reach 40% by 2016 and aims to
serve 6,000 Zambian SMEs by 2017.
The AfDB LoC will enable MFC to reach SMEs across a wide
range of sectors including trade, agriculture, construction,
manufacturing and hospitality and services.
The facility is expected to support at least 1,000 SMEs,
including 500 female-owned businesses, over the project
period.
Leveraging the medium tenor of the AfDB facility, it is expected
to increase the average loan size and tenor for SME clients who
can consequently invest towards enhancing their productive
capacity and undertake capital investment, rather than using
loans solely for working capital financing purposes.
In addition to the LoC, MFC will benefit from technical
assistance supported by the Fund for African Private Sector
Assistance (FAPA) and governments of Japan and Austria.
This project falls under the AfDB's Africa SME Programme.
Approved by the AfDB's Board of Directors in July 2013, the
Africa SME Programme is a four-year, US $125-million funding
programme combined with a US $3.98-million technical
assistance package granted by FAPA.
The goal of the Africa SME Programme is to provide medium to
long-term finance and technical assistance in order to address
constraints faced by financial institutions and their SME clients
across Africa.
The Africa SME Programme will avail further longer-term
resources to thousands of SMEs, including businesses owned
by women and youth, thus contributing to job creation,
poverty reduction and inclusive growth on the continent.
Source: African Development Bank (AfDB)
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