The European Union (EU) and the European Investment Bank (EIB Global) have joined forces with local banks to address the long-standing financing gaps in Zambia’s agricultural value chain through the Zambia Agriculture Value Chain Facility (ZAVCF).

The initiative aims to support smallholder farmers, emergent farmers, and commercial farmers by providing access to finance and technical assistance to improve agricultural productivity and commercialization.

Head of the EIB Regional Hub for Southern Africa and the Indian Ocean Jim Hodges stated that EIB Global is committed to supporting Zambia’s agricultural sector, which is critical to the country’s economic growth and development. The international Bank is working closely with local banks to ensure that financing reaches where it is needed most.

Through ZAVCF, the EIB has partnered with Zanaco, First Capital Bank, and Zambia Industrial Commercial Bank to provide credit lines to support agricultural value chain development.

Zanaco’s Senior Relationship Manager, Ali Sikalangwe, stated that the partnership with EIB enables Zanaco to support its farmers, including smallholder farmers, emergent farmers, and commercial farmers, to grow their business operations.

Nigel Mark Lacey, Managing Director of Galaunia Farms, said the farm has had a long-standing relationship with Zanaco, which has been instrumental in financing their working capital needs. “The critical thing for us is the nature of the borrowing that we are able to borrow in dollars”. Because we sell our crops, wheat and soya in dollars, then we can borrow in dollars at a much more viable interest rate, which means that we can be profitable, which means that we can look after our workers, our staff, and the local community

Joyce Nambeye, a farm manager at Matuka Farm, said the loan from Zanaco has helped Matuka Farm acquire irrigation systems, which has improved its farming operations. Before receiving the financing, issues with loadshedding meant they could not irrigate or spary their crops as they wished. Now, with the new irrigation system set up, their operations go on un-interrupted.

Rajendra S Patel, Managing Director of Amadeus International, stated that finance was a major issue until Amadeus International partnered with Zanaco. The partnership has enabled Amadeus International to expand its operations and improve its productivity. He said ZANACO introduced the EIB Global offer to him and the application process was smooth and very efficent. Within no time, he had received the funds he needed

The EU and EIB Global have also provided technical assistance to strengthen local agricultural systems and build capacity among partner banks and beneficiaries.

The initiative has achieved significant results, including the deployment of a EUR 15 million credit line from EIB to Zanaco, which the local bank matched. Zanaco has already fully disbursed the funds to support smallholder farmers and rural cooperatives, showing the huge appetite for affordable financing that exists in the market.

EIB Global has also partnered with First Capital Bank to develop Small and Medium Enterprises in the agriculture sector through a $10 million developmental line of credit.

Zambia Industrial Commercial Bank has also received a EUR 15 million credit line from EIB to support private sector development in the agricultural sector.

The partnership is expected to have a lasting impact on Zambia’s agricultural sector, improving the livelihoods of smallholder farmers and contributing to the country’s economic growth.