Development Bank of Zambia approves 17 projects totalling K42.8 million

THE Development Bank of Zambia (DBZ) has disbursed about K7.6million to small and medium-scale enterprise (SME) projects from the US$20 million line of credit allocated under the US$750 million euro bond proceeds.
DBZ, which has approved 17 projects totalling K42.8 million, has disbursed K7.6million to various projects as at July 15, in line with Government’s commitment to fostering the growth of SMEs.
Bank managing director Jacob Lushinga said the projects from six sectors are expected to create 151 jobs once fully funded. The sectors are agriculture, manufacturing, education, engineering, services and tourism.
“The bank has, since the receipt of the funds, assessed the viability and approved some projects to which funds have been disbursed …Other approved projects are still signing loan agreements and other formalities before the money can be released,” Mr Lushinga said in response to a press query last Friday.
Of the K42.8 million, the agriculture sector will receive the largest chunk of K20.3 million representing 70 percent while the manufacturing sector will receive K9 million.
Education, engineering, services and tourism sectors will receive K6.2million, K4.1 million, K2million and K1.1million, respectively.
Mr Lushinga said DBZ is expected to fund 42 projects at a cost of K95.6 million from the euro bond proceeds, a move that will result in the creation of over 6,400 jobs.
The injection of the funds in SME projects will help in reducing poverty and fostering economic development.
“It is anticipated that by September, when all earmarked projects are approved and funds disbursed, the bank will surpass the total disbursements for the year 2012 by over K45million, which will contribute to the overall economic and enterprise growth,” he said.
Mr Lushinga said the bank, which got a line of credit for SME projects from the euro bond proceeds in March this year, has received numerous applications and anticipates to disburse the whole allocation by the end of the year.
Meanwhile, Mr Lushinga says the bank has in the last two years financed 36 companies in various sectors of the economy, disbursing K51.4 million last year, a decline from K94.3 million in 2011.
“The decline to K51.4 million in 2012 is largely because the 2011 numbers were pushed up by large disbursements towards apex funding of other financial institutions,” he said.
Of the 36 companies, 25 were funded under the enterprise development programme while seven financial institutions were funded in line with DBZ’s mandate to provide adequate and affordable project finance to SMEs through other financial intermediaries.
Four micro finance institutions were funded by the bank under the rural finance programme (RFP) with the aim to provide extended credit facilities to rural farmers and entrepreneurs.