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Supporting AB Bank Zambia in order to assist SMEs and micro-entrepreneurs in Zambia
Project
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Signature date
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Location
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Zambia
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Financing tool
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Financing amount (Euro)
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1980000
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Financing details
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ZMW 25,000,000 Equity investment and EUR 180,000 Technical assistance
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Customer
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AB Bank Zambia
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Type of customer
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Financial institution
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Country of headquarters
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Zambia
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Project number
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IZM1000
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Environmental and social ranking
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IF-C
This information is given at the time of signature, without prejudice to any developments in the operation/project.
FISEA has become a shareholder of AB Bank Zambia, the only bank which finances SMEs and micro-entrepreneurs in Zambia. This capital contribution will improve access to financing for micro-entrepreneurs, smallholders and SMEs in the country.
Client presentation
AB Bank Zambia is the only bank which finances SMEs and micro-entrepreneurs in Zambia. At the end of 2017, its balance sheet totaled EUR 24m. ABZ operates via a network of 7 branches, employs 419 people and has 14,754 borrowers.
Project description
The project involves a participation in the capital increase of AB Bank Zambia. Following this capital increase, FISEA holds 22.5% of the capital of ABZ. A technical assistance budget in 2020 will help AB Bank Zambia introduce digital savings and loan products for people in rural areas.
Project impact
On the economic front, the capital contribution will allow the institution to continue to serve some 15,000 clients, 96.4% of which are micro-entrepreneurs and smallholders (accounting for 54.7% of the portfolio), and 2.1% are SMEs (41.2% of the portfolio).
The bank’s activity is important for the support it provides to the development of Zambian SMEs, in particular for the wholesale and retail trades (28%), the transport, logistics and communication sectors (20%), catering (16%) and community services and services to individuals (12%).
The loans allocated by ABZ are generally earmarked for capital investment and the working capital needs of borrowers.
The project will directly allow the creation of several new branches (2 of which will serve rural areas) and will create or maintain 621 jobs in the bank.