The Swedish International Development Cooperation Agency (Sida) and the UN Capital Development Fund (UNCDF) have launched a new partnership to solve financing gaps Micro, Small and Medium Enterprises (MSMEs) face in Zambia with innovative financial services.
According to a press statement issued by UNCDF Communications Consultant Mali Nkhoma, the new partnership is expected to improve financing for many entrepreneurs by addressing the challenges MSMEs are facing by using digital technologies when they need credit or capital to run and grow their business.
UN Resident Coordinator Coumba Mar Gadio, launched the partnership along with Susanna Hughes, Head of Development Cooperation at the Swedish Embassy and Francois Coupienne, UNCDF Global Digital Lead at a function attended by government ministries, commercial banks, and innovation hubs that work closely with MSMEs.
Dr Coumba said she was delighted with the new partnership between Sweden and UNCDF which will transform Zambia’s MSME sector through offering workable loans and guarantee facilities.
“The United Nations is hopeful that this partnership ensures that digitally-enabled MSMEs will be supported and strengthened, so that they will be able to extend their services to reach all Zambians, while improving livelihoods”, said Dr Coumba.
Head of Development Cooperation at the Embassy of Sweden in Lusaka Susanna Hughes noted that MSMEs in Zambia are the backbone of the economy but face challenges in accessing finance and business management, thereby affecting productivity.
“We believe that digital financial services can reduce this gap and contribute to poverty reduction, improved livelihoods and economic growth. We also believe that digitally enabled MSMEs are really important in providing services – and job opportunities that benefit women and young people,” said Ms Hughes.
And the UNCDF commended the Swedish government for the continued support to the MSME sector in Zambia.
“We are pleased that Sweden has extended its long-standing partnership with UNCDF into Zambia. This partnership stems from our common vision of building inclusive digital economies that leave no one behind in the digital era. Our partnership aims to support the MSME sector in Zambia with innovative financing instruments. Digitalizing financial services for MSMEs will impact under-served segments such as women and youth and contribute to Zambia’s development” said Henri Dommel, UNCDF Director Inclusive Finance.
The UNCDF and Sida are hoping to increase access to and usage of credit facilities such as Pay-as-you-go solutions for digitally-enabled MSMEs in sectors such as finance, energy, agriculture and trade in order to improve their services.
Ms Nkhoma said the UNCDF expects the financing arrangement to strengthen the MSMEs’ delivery of products and services to rural people, especially women and youths in order to help sustain their economic activity.
She said the UNCDF will work with MSMEs and enable them to leverage the digital financial services ecosystem that has been strengthened over the last six years.
The numbers are telling with active digital finance users increasing from 2 percent of the population to 44 percent of the population between 2014 and 2019.
Ms Nkhoma said the technical assistance offered to MSMEs will also capture how the businesses adapt to the post-Covid business environment and proactively work with gender equality and inclusion of youth in their businesses.
They don’t like PF, and don’t claim this for campaigning for your illegal PF candidate.