AfDB Approves US$3M Loan to Madison Finance (Mfinance) Company Zambia
THE African Development Bank (AfDB) has approved a US$3 million line of credit (LoC) facility for Madison Finance (Mfinance) Company Limited through its private sector window.
Mfinance is a local financial institution targeting local small and medium enterprises (SMEs) by offering various financial products and services such as loans, leasing, invoice discounting and insurance.
The company aims at increasing its SME portfolio share targeting 30 per cent by the end of 2015, with it expects to reach 40 per cent by 2016 and 6,000 Zambian SMEs by 2017.
According to a statement released at the weekend, the AfDB LoC will enable Mfinance to reach SMEs across a wide range of sectors including trade, agriculture, construction, manufacturing and hospitality and services.
The facility was expected to support at least 1,000 SMEs, including 500 female-owned businesses, over the project period.
“Leveraging the medium tenor of the AfDB facility, it is expected to increase the average loan size and tenor for SME clients who can consequently invest towards enhancing their productive capacity and undertake capital investment, rather than using loans solely for working capital financing purposes,” AfDB said.
In addition to the LoC, the company would benefit from technical assistance from the Fund for African Private Sector Assistance (FAPA) and governments of Japan and Austria.
This project falls under the AfDB’s Africa SME Programme.
Approved by the AfDB’s board of directors in July 2013, the Africa SME Program is a four-year,$125 million funding programme combined with a $3.98 million technical assistance package.
The goal of the Africa SME Programme is to provide medium to long-term finance and technical assistance to address constraints faced by financial institutions and their SME clients across Africa. Source: Times Zambia