Small companies in €4.5m EIB boost

THE European Investment Bank (EIB) has injected €4.5 million (about K33.7 million) in Madison Finance Company to support micro, small- and medium-scale enterprises (MSMEs) across the country.
The loan to be disbursed over an eight-year period will lower the funding gaps among low-income individuals and MSMEs in the country.
EIB head of regional representation for southern Africa and Indian Ocean Carmelo Cocuzza said at the signing ceremony that the loan, which is under the Southern Africa Microfinance facility will enable Madison Finance Company improve its financial capacity to provide finance to enterprises, which encourage job creation and economic growth.
“The loan agreement will also provide Madison Finance Company with technical assistance in areas of screening, allocation and implementation of the line of credit and improve the company’s financial performance in fulfilling its capital adequacy,” he said.
Less than 20 percent of households have access to formal financial services in Africa.
Mr Cocuzza said supporting financial intermediaries such as Madison Finance Company will therefore, go a long way in lowering barriers to access finance.
It will also offer suitable financial products that allow businesses to maximise their potential to grow their incomes and increase jobs to contribute to the country’s growth.
He said, “Evidence shows that the economies with deeper financial intermediation tend to grow faster and reduce income inequality.”
Earlier, Madison Finance Company chairman Alfred Lungu said the firm plans to grow its MSME portfolio to about US$40 million by 2017 and the loan injection by EIB will go a long time in attaining the objective.
“Our mission is to transform the lives of people in Zambia through the provision of innovative financial solutions,” he said.
At the same occasion, Madison Finance Company managing director Kenny Simwaba said the firm which has 27,000 MSMEs and personal loans plans to double the number by 2016.

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