Swedfund and BII establish a new company to fund small and medium-sized enterprises in Zambia
New Investment Company Launched to Boost SME Growth in Zambia
A new investment company, Growth Investment Partners Zambia (GIP Zambia), has been launched with an initial funding of $70 million. The company aims to provide long-term, flexible capital to Small and Medium Enterprises (SMEs) in Zambia, addressing a significant financing gap that has long plagued the sector.
Backed by British International Investment (BII), Zambia’s National Pension Scheme Authority (NAPSA), and Sweden’s Swedfund, GIP Zambia is poised to deploy over $300 million over 15 years, supporting approximately 150 SMEs.
Key features of GIP Zambia include long-term, flexible financing solutions, a focus on local currency funding to reduce currency risk, a commitment to support sectors driving Zambia’s economic growth, and a strong local presence and expertise. The company aligns with Zambia’s national development goals, such as Vision 2030 and the 8th National Development Plan, which promote private sector growth, job creation, and economic diversification.
GIP Zambia aims to provide capital primarily in local currency to address the long-term acute shortage of financing in Zambia. SMEs account for more than 70% of Zambia's GDP and provide 88% of employment, according to BII. The company's mission is to help create jobs and make SMEs more attractive for investors.
The company builds on a template developed in Ghana, where GIP Ghana was launched in 2023. Musonda Chipalo, who has spent much of his career working in finance at the International Finance Corporation, heads GIP Ghana. There will be a strong focus on inclusive business ownership, notably support for women and locally owned and led firms.
BII contributed $37.5 million, Swedfund committed $15 million, and NAPSA provided $17.5 million for GIP Zambia. Key economic sectors to be prioritized include manufacturing, agriculture, and financial services.
The launch of GIP Zambia was officiated by Zambia’s president, underscoring strong government support for boosting SME growth through sustainable and patient capital. The company's mission is to serve as a locally grounded, patient, and flexible capital provider aimed at unlocking SME growth in Zambia, fostering economic growth, job creation, and inclusive development.
- The new investment company, Growth Investment Partners Zambia (GIP Zambia), plans to invest in blended finance, utilizing both private equity and development finance, to support Zambia's energy transition.
- With the commitment to back local businesses, GIP Zambia will primarily be investing in real-estate and businesses, particularly in key sectors like manufacturing, agriculture, and financial services.
- As part of its long-term strategy, GIP Zambia aims to make investing in Small and Medium Enterprises (SMEs) in Zambia more appealing to the finance sector, supporting around 150 SMEs over 15 years.
- Aligning with national development goals, GIP Zambia prioritizes local currency funding to reduce currency risks, and it's commited to supporting sectors driving Zambia’s economic growth, fostering business growth, job creation, and inclusive development.
