Credit Support for SMEs

ZCGS, First Alliance team up to de-risk lending and expand outreach.

By Francis Maingaila

LUSAKA, 17 July 2025 – First Alliance Bank and the Zambia Credit Guarantee Scheme (ZCGS) have signed a Memorandum of Understanding (MoU) aimed at improving access to affordable financing and business development support for Small and Medium Enterprises (SMEs) across Zambia.

The agreement is expected to unlock credit for SMEs traditionally excluded from mainstream financing due to high interest rates and limited collateral. ZCGS will provide credit guarantees, while First Alliance Bank will offer loans through its national branch network.

“This partnership increases our capacity to serve more SMEs in more parts of the country,” said ZCGS Chief Executive Officer Mary Mumba. “It’s not just about credit—it's about affordable credit and holistic support for sustainable growth.”

She emphasized that SMEs often face more than just financial barriers.

“Many SMEs don’t fail because of a lack of money alone—they fail because they lack the skills to manage and grow a business,” she said. “That’s why we also offer business coaching, mentorship, and market access services through our network of partners.”

First Alliance Bank Managing Director Dr. Kuldip Paliqal said the partnership is in line with the bank’s long-term strategy to empower SMEs, which he described as “the backbone of Zambia’s economy.”

“SMEs contribute over 70 percent to the GDP and 80 percent of employment,” Paliqal said. “Yet their access to finance remains critically low. This partnership gives us a way to change that, with reduced risk and greater confidence in lending.”

He added that results from the partnership should be visible within six months.

“We are not talking years here,” he said. “We expect to see real impact in the short term—more SMEs accessing loans, growing their businesses, and contributing to economic development.”

Mumba echoed the sentiment, noting that ZCGS was already seeing an increase in demand from SMEs across various sectors.

“With First Alliance Bank on board, we can diversify our portfolio and reach new sectors,” she said. “We are confident this partnership will make a measurable difference.”

Both institutions expressed optimism that the agreement would strengthen Zambia’s SME ecosystem by combining financial inclusion with practical business development support.