IFC Invests in Zanaco to Increase Finance for Agribusiness and Smaller Companies in Zambia
IFC Press Release -
IFC, a member of the World Bank Group, will invest in Zambia National Commercial Bank PLC (Zanaco) to help increase access to finance for smaller entrepreneurs and agribusiness companies, which contribute a significant portion of Zambia’s economic output, the two institutions announced today.
Zanaco will use the $25 million senior loan from IFC to increase products and services that target small and medium enterprises, especially in the agricultural sector. It will also expand its lending in less developed and rural regions of Zambia, where many entrepreneurs and businesses face difficulties accessing finance, and raise its environmental and social standards.
Mark Wiessing, Zanaco’s Managing Director, said “Zanaco has an extensive network of branches across all of Zambia and a track record of developing new products and services to reach Zambian businesses. Working with IFC will enable Zanaco to more easily extend longer-term loans to clients and contribute significantly to supporting the expansion of Zambia’s growing private sector.”
Rachel Kyte, IFC Vice President for Business Advisory Services, said, “IFC is committed to helping build a more inclusive financial sector in Zambia by increasing access to finance for smaller businesses, including in the agribusiness sector. IFC hopes to build on our strong relationship with Zanaco to also increase financing to other important sectors of Zambia’s economy, such as infrastructure and mining.”
The investment builds on an existing partnership under which IFC and Zanaco are working together and with other partners such as Rabobank and the Zambia National Farmers Union to help train and increase access to finance for some of Zambia’s farmers.
Kyte is in Zambia on a two-day visit to see how IFC can increase its investments and advisory services to support the country’s sustainable economic growth. She is meeting with government officials, private sector clients, and donors and development partners.
Saleem Karimjee, IFC Country Manager for Southern Africa, said, “The Zambian economy has made excellent progress in the past few years, and is presenting more and more opportunities for IFC to engage in private sector development. I am delighted to announce that IFC has decided to post a Senior Investment Officer in Lusaka. He should be starting within the next few weeks.”
IFC’s strategy in Zambia focuses on diversifying the economy by increasing the competitiveness of agribusiness, manufacturing, and services sectors; working with the financial sector to make it easier for small and medium businesses to access finance; promoting private participation in power, telecommunications, and other infrastructure; and helping improve the overall investment climate.
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing capital for private enterprise, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit www.ifc.org.
Zanaco was created in 1969 by the government of the Republic of Zambia. It was the first bank to explicitly target the provision of financial services to all, in the belief that an economy cannot grow sustainably and equitably if its population does not have access to financial services.
As a result, a growing and well diversified customer base has allowed Zanaco to grow into one of the leading banks in Zambia. The bank was partially privatized in 2007, with Rabobank of the Netherlands buying a 49% stake in the bank from GRZ, and its mission to be the bank for all Zambians in rural and urban areas continues unabated.
In 2008 the bank was listed on the Lusaka Stock Exchange, thus successfully concluding one of Zambia’s largest privatizations, and empowering Zambians of all walks of life, including the bank’s employees, to become shareholders of their bank, and ensuring it remained “Citizen Owned”. Zanaco is currently owned 46% by Rabobank, 25% by GRZ, while 29% is held by local institutional and private investors and employees.