ZCGS Boss Applauds Increased Guarantee Funding in 2024 Budget

Zambia Credit Guarantee Scheme Limited Chief Executive Officer Mary Mumba has applauded Government’s decision to increase funding to the scheme from ZMW150,000,000 in 2023 to ZMW 386,000,000 in 2024 representing an increase of more than 100%. Speaking after the budget presentation by the Minister of Finance and National Planning, Honorable Situmbeko Musokotwane, Ms. Mumba expressed delight that the Government continues to show confidence in the scheme and its potential to unlock the economy through facilitating increased funding to MSMEs.

Ms. Mumba added that funding to the scheme has significantly risen from the initial ZMW1.2 that was given as the first guarantee fund in the year 2021. She further explained that with an increased guarantee fund, the scheme was able to increase its outreach to more MSMEs across the country. This was to be done by increasing the limits that different financial institutions held with the scheme. “For example, if a financial institution has a limit of ZMW 20 million, this means they can only give loans to the tune of that figure.” Said Ms. Mumba. This had posed a challenge as some financial institutions lamented that the limits were preventing them from providing loan facilities to more clients as they always tried to operate within the limit.

Ms. Mumba revealed that the scheme would increase the loan limits with financial institutions and also add more partners so as to increase the coverage across the country.

She was also happy to report that the scheme is currently partnering with eight financial institutions with a further 5 more to be brought on board soon. She also appealed to financial institutions to work towards reducing interest rates and reduce the requirements for one to access an MSME loan. She noted that interest rates have been going up recently making the cost of accessing loans high for MSMEs. She revealed that the guarantee scheme would ensure that all financial institutions that had partnered with it offer lower interest rates to guaranteed loan facilities.

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