Zambia’s small firms are set for a new flow of long‑term capital after British International Investment, Sweden’s Swedfund and Zambia’s National Pension Scheme Authority launched a $70m investment company to tackle the country’s chronic Zambia SME financing gap. Growth Investment Partners Zambia (GIP Zambia) was unveiled in Lusaka on 15 July 2025 at a ceremony officiated by President Hakainde Hichilema.
The new vehicle will provide patient, flexible funding principally in local currency to small and medium‑sized enterprises that struggle to secure growth capital from banks or traditional private equity funds. Designed to sit alongside bank lending rather than replace it, GIP Zambia intends to offer longer tenors, reduced collateral demands, more flexible repayment terms, risk‑sharing structures and tailored business support.
An initial $70m anchor close has been secured: BII has committed $37.5m, NAPSA $17.5m and Swedfund $15m. The partners say they are already in talks with additional domestic institutional investors to join subsequent rounds as the platform scales and deepens Zambia SME financing.
Over the next 15 years the platform aims to mobilise more than $300m and invest in roughly 150 businesses across the country. Early priorities include manufacturing, agriculture and financial services sectors seen as critical to diversification beyond mining. The partners say they will place a strong emphasis on inclusive ownership, backing women‑led and locally owned firms.
Small and medium‑sized companies are widely viewed as the backbone of the Zambian economy, accounting for more than 70% of gross domestic product and about 88% of employment, according to data cited by the partners and government agencies. Yet access to appropriate finance remains uneven, leaving many entrepreneurs unable to expand, formalise or create jobs; one reason Zambia SME financing has become a policy priority.
Research by BII indicates that more than 40% of Zambian SMEs surveyed face difficulties obtaining finance suited to their growth needs. Constraints include banks’ limited risk appetite, high collateral requirements and the short investment horizons typical of conventional private equity funds factors that have contributed to the persistent Zambia SME financing gap.
GIP Zambia is targeting established growth‑stage firms with annual revenues or assets between about $100,000 and $15m and financing needs in the $500,000 to $5m range sizes often too small for mainstream private equity but too large or risky for many banks. Eligible businesses must be registered limited liability companies that are creating jobs, and the platform aims to lend and invest in kwacha, where possible, to shield borrowers from foreign‑exchange swings that can cripple balance sheets.
Early participation by NAPSA, Zambia’s largest pension fund, alongside Swedfund, Sweden’s state‑owned development finance institution is intended to crowd in more local and bilateral capital. BII, the United Kingdom’s government‑owned development finance institution, is courting additional Zambian pension and insurance investors to broaden the pool backing Zambia SME financing.
The platform is led by chief executive Musonda Chipalo, a former International Finance Corporation finance professional, and adapts a model first piloted in West Africa through Growth Investment Partners Ghana in 2023. BII says the approach combining long‑dated capital with hands‑on support could be replicated in other markets to help close Africa’s wider $330bn‑plus SME financing shortfall and attract domestic pension and insurance funds into productive investment.
For Zambia, the launch dovetails with national development goals under Vision 2030 and the Eighth National Development Plan, both of which call for private‑sector‑led growth, job creation and economic diversification. Officials hope that by easing Zambia SME financing constraints the new vehicle will support formalisation, broaden the tax base and deepen local capital markets.
The timing is significant. After a severe regional drought in 2024, Zambia’s economy has shown surprising resilience. IMF staff in June projected real GDP growth of about 5.8% in 2025, supported by a rebound in agriculture, increased copper output and a recovery in electricity generation. A finance ministry plan released on 21 July sees growth accelerating to 6.4% in 2026 as mining investment picks up.
President Hichilema has repeatedly argued that nurturing small businesses is essential to spreading that growth. At the launch he said Zambia cannot achieve its economic ambitions without stronger SMEs that create jobs in every province, a point echoed by the international partners.
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