Zambia’s “Big Joe” Initiative Unlocks Affordable Financing for MSMEs
Many Zambian entrepreneurs face challenges in securing financing for their business ventures due to limited collateral and a lack of audited financial statements. However, the Zambia Credit Guarantee Scheme Limited (ZCGS), dubbed “Big Joe,” is stepping in to bridge this gap by guaranteeing loans and reducing interest rates for Micro, Small, and Medium Enterprises (MSMEs).
Established in 2017, ZCGS is a public agency owned by the Government of Zambia through the Ministry of Finance and National Planning. Its goal is to share the risk with financial institutions, making it easier for MSMEs to access the capital needed for growth and expansion.
In 2024, ZCGS provided guarantees for over 9,000 loans, with a total value exceeding K400 million. This represents a significant increase of over 170% compared to the previous year.
Speaking at a recent Breakfast Roundtable Discussion at Southern Sun Hotel, ZCGS CEO Ms. Mary Mumba emphasized the scheme’s commitment to financial inclusion.
“We allocate approximately 30% of our portfolio to women and youth entrepreneurs, ensuring that marginalized groups have the opportunity to access affordable financing,” Ms. Mumba stated.
The scheme’s impact is particularly significant in the agricultural sector, which accounted for 71% of the guaranteed loan amounts in 2023. Additionally, other key sectors, including mining, logistics, retail, and trade, have also benefited from ZCGS guarantees.
Entrepreneurs like Gerald Hamuyayi, who sought a K700,000 loan to expand his chicken farming business, have found relief through the ZCGS initiative. Initially turned down by financial institutions due to insufficient collateral and operational history, he was later able to secure the loan with a reduced interest rate of 22.5%, thanks to the backing of ZCGS.
Looking ahead to 2025, the Zambian government has allocated K852 million to the scheme, more than doubling the previous budget. This substantial increase is expected to further amplify ZCGS’s impact on job creation, poverty reduction, and economic development.
