Where is the access to finance?

The role of financial institution in lending money to small enterprises in Zambia is a sticky point. Banks promise to be helpful (…lets dare to care….) , but still the most people wont have a chance for a loan.

Its a busy afternoon on Buseko market in Zambia's capital Lusaka. Patrick Zangi is standing in the sun and cuts aluminium bars. The 52 year old man constructs windows and door frames. He has been in the business for more than 35 years but he has never been able to expand it. Patrick blames it on the banks.”They don’t give us information about their procedures and offers.”

Many small and medium enterprise in Zambia are facing difficulties in obtaining loans from financial institutions due to high cost of interest rates. The range is up to 30 percent from the bank, and 15 percent from micro finance institution. That is why Zambian government established a citizen economic empowerment Commission (CEEC) to assist the smes in terms of lending,

Victoria Chirwa of Zambia Chamber of Small and Medium Business Associations critises the work of the CEEC. “We have problem with CEEC cause their condition is too daft the interest rate is reasonable, but the procedure is combasant.”Victoria Chirwa also don’t like that the CEEC demands a business plan,a bank account and collateral among other things. “Only few people can provide all the requirements for CEEC loans.”

Mabel Mungoma, the CEEC director general, defends the strict policies of her commission. “The success is not about how many people we funded,it is in how many business are standing after a period .”The CEEC is very careful about giving out loans. In the beginning they made bad experiences with people not paying back. says Mabel Mungoma.

Patrick's business of making iron window frames has been standing for the very long period of over 35 years, yet he has never applied for loan. Patrick is worried about the costs of a loan, he doesn’t want to take one even if he meets the requirements of the CEEC. Like Patrick many small business people are deeply frustrated about the banks, they don’t believe in a change, and for them CEEC does not provide the solution

Ali Falaki