Release date: 16 May 2022
Promoter – Financial Intermediary
FIRST CAPITAL BANK ZAMBIA LTDLocation
Description
Credit line for First Capital Bank Zambia for on-lending to eligible small and medium-sized enterprises (SMEs) and mid-caps active in agriculture value chains.
Additionality and Impact
Access to finance is one of the main market constrains in Zambia, particularly for long term financing. The proposed RSF and the complementary Agriculture Value Chain lending financing bear a longer maturity than typically available in the market. This operation will reduce credit risk for financial intermediaries financing primary and secondary agriculture projects, one of the drivers of the country's economy. The RSF will allow the FI to reduce the commonly very high collateral requirements when lending, mainly to SMEs active in the sector.
The EIB aims through this operation to generate opportunities to: (i) promote inclusive value chain development by integrating smallholders, increase income, more secure linkages and access to new markets and services (ii) foster green and sustainable agriculture and (iii) embrace digitization in the targeted sector.
The FI and potentially final beneficiaries will further benefit from Technical Assistance focussed on a broad range of capacity building activities.
The project is under the auspices of the EU's external action plan NDICI and its Investment Framework as well as the African Union's Agenda 2063 and the EU Sub-Saharan Africa Multi-Annual Indicative programme 2021-2027, which supports a stronger regional and continental economic integration.
Objectives
Financing of primarily agriculture value chain projects carried out by final beneficiaries including small and medium-sized enterprises.
Sector(s)
- Credit lines - Credit lines
Under Global Europe NDICI guarantee
Under EFSD+ Guarantee
Proposed EIB finance (Approximate amount)
EUR 10 million
Total cost (Approximate amount)
not applicable
Environmental aspects
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
Procurement
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
Status
Signed - 9/06/2023
Disclaimer
Before financing approval by the Board of Directors, and before loan signature, projects are under appraisal and negotiation. The information and data provided on this page are therefore indicative.
They are provided for transparency purposes only and cannot be considered to represent official EIB policy (see also the Explanatory notes).