THE Zambia Development Agency (ZDA) has called on exporters to grow their businesses by utilising the Zambia Export Development Fund (ZEDEF), whose interest rate is at eight percent.
ZEDEF is a fund managed by ZDA and its objective is to contribute to the increase in non-traditional exports (NTEs) through provision of low-cost export finance across sectors.
ZEDEF lends out funds at libor, a benchmark rate that some of the world’s leading banks charge each other for short-term loans. The minimum is US$10,000 while maximum is US$100,000.
ZDA manager export development Albert Halwampa said the agency through the ZEDEF offers short-term loans, which include working capital, pre-and-post shipment finance, advisory services and capacity building so that they do not fail to pay back the loans.
Mr Halwampa said over the weekend, on a Zambia National Broadcasting Corporation’s radio programme dubbed ‘Investment Trends’, that ZDA is encouraging exporters to access the fund because they will not be burdened by high interest rates.
“The main objective of the fund is to contribute to the increase in NTEs for the country. We are saying that about 10 percent of the total NTEs in Zambia should be coming from the exporters [that] we fund on an annual basis.
“We want to ensure [that] we increase NTEs by providing low-cost finance to exporters in Zambia. Our interest rates are the lowest – we lend at libor, which is about 1.2 percent plus six percent; we roughly come to a total of eight percent,” he said.
Sectors ZEDF lends out to include leather, primarily agriculture and refined food apart from copper and cobalt.
To access the fund the borrower needs to have a bankable business plan, a registered company, a readily export market and collateral among others.
Mr Halwampa said of the total budget, ZEDF funds upto 75 percent and 25 percent comes from the borrower.