Zambia - Development Bank of Zambia

The present project consists of a government-guaranteed line of credit (LOC) of the equivalent of USD 50 million with a maturity of 10 years (including a 3-year grace period) provide to the Development Bank of Zambia. The LOC will be disbursed in USD and Zambian kwacha (ZMW) in shares to be determined. The disbursement will occur in two tranches. The LOC will be used to finance DBZ’s multi-sector pipeline and is expected to be fully on-lent to Zambian small and medium-sized enterprises (SMEs). The main development outcomes are expected to arise from (i) private sector development through alleviation of financing constraints for SMEs and financial sector development, (ii) household benefits and job creation and (iii) gender and social effects through support to the underserved communities. The project’s contribution to inclusive growth is assessed to be high given the SME focus of the LOC.