New Line of Credit for Farmers, SMEs
By Francis Maingaila
Lusaka, Zambia24 — (17 March 2026) — The Government of Zambia, in partnership with the World Bank and participating financial institutions including Zanaco, has launched a new line of credit aimed at expanding access to affordable financing for farmers, agribusinesses and small and medium-sized enterprises (SMEs).
The government-backed facility is expected to boost agribusiness investment, improve market access and strengthen agribusiness value chains while supporting the growth of small enterprises across the country.
Hichikumba explained that the Line of Credit will provide businesses with loans at reduced interest rates, capped depending on the borrower’s risk profile, which are significantly lower than prevailing commercial lending rates.
He said the financing mechanism is a key instrument under the Zambia Agribusiness and Trade Project designed to support access to finance and markets while promoting the growth of agribusiness firms and producer organisations.
“The Line of Credit we are launching today is designed to support marketing-stage alliances between farmers, producer organisations and agribusiness firms under the productive alliances model,” Hichikumba said.
He added that the project has allocated substantial funding to the facility, with the appointed fund manager contributing additional resources to increase the total financing available under the project’s two key instruments — the Line of Credit and matching grants.
Hichikumba said the financing instruments will enable producer organisations and agribusiness firms to invest in equipment, expand processing capacity and adopt productivity-enhancing technologies.
He emphasised that access to affordable financing is critical for unlocking the potential of Zambia’s agribusiness sector and enabling farmers and businesses to expand operations and improve productivity.
Hichikumba acknowledged that many agribusiness enterprises and producer organisations face challenges accessing investment capital due to high borrowing costs and the perception that agricultural financing carries high risks, particularly in the context of climate change.
He said the facility, supported by the World Bank, aims to address these challenges by providing sustainable and affordable financing options that can stimulate economic activity and strengthen the agriculture sector.
Hichikumba further explained that the initiative aligns with Zambia’s financial inclusion agenda, which targets 85 percent financial inclusion by 2028.
He said the Line of Credit will be administered by participating financial institutions selected to extend loans to eligible businesses across all ten provinces and 100 districts.
Hichikumba encouraged additional financial institutions to participate but stressed the need to comply with environmental and social safeguard requirements consistent with World Bank standards.
He said the government believes the initiative will strengthen agribusiness value chains while contributing to economic growth, job creation and improved livelihoods for farmers and small enterprises.
Simmy Chapula said the facility will support businesses that are already engaged in production but lack sufficient capital to expand and increase productivity.
Chapula explained that the project, implemented by the ministry, is designed to strengthen agribusiness development and improve market access for producers across the country.
He added that the project has expanded to cover all ten provinces following an initial pilot phase.
“The Line of Credit is intended to provide affordable investment finance to producer organisations and agribusiness firms so they can unlock their potential, expand their investments and increase productivity,” Chapula said.
Chapula noted that the project is supported by World Bank funding aimed at strengthening investment in agribusiness value chains.
He explained that the first phase of the project provided matching grants to producer organisations and agribusiness firms for investments such as equipment.
Chapula said the newly introduced Line of Credit will complement the grants by providing additional financing to businesses seeking to scale up operations.
Fock explained that entrepreneurs, SMEs and producer organisations currently receive only a small portion of total private sector credit, while very few can access start-up or early-stage financing from formal financial institutions.
He said the facility is part of the Zambia Agribusiness and Trade Project Phase II, which aims to strengthen agribusiness development and improve competitiveness in both domestic and international markets.
Fock said the initiative is expected to encourage more financial institutions to invest in the sector and expand financing for agribusiness enterprises.
He emphasised that the World Bank remains committed to supporting Zambia’s economic development through partnerships that strengthen private sector growth.
Blerta Qermi, Task Team Leader for the World Bank, said Phase Two of the project builds on lessons learned from Phase One, which provided financing to SMEs and farmers but identified access to finance as a major challenge.
“Feedback from the private sector highlighted that access to finance was a critical missing element. Phase Two has been designed to address this, reaching all ten provinces and targeting over 133,000 beneficiaries,” Qermi said.
She added that the project is also expected to create more than 12,000 jobs, with the line of credit alone projected to support at least 350 businesses.
Qermi noted that access to finance ranks as the third most significant challenge for Zambian businesses after electricity and regulatory barriers.
She described the facility as a major milestone in addressing the financing gap faced by entrepreneurs and smallholder farmers.
Qermi expressed optimism that more financial institutions will participate in the initiative to ensure the credit facility reaches a broader range of businesses.
“Congratulations to all partners involved. You can count on the World Bank team for support as we implement this critical initiative,” Qermi said.
Vincent Chuunga, Acting Chief Executive Officer of Zanaco, described ZATP Phase Two as a milestone for the agriculture sector and the Zambian economy.
Chuunga said the project marks a new chapter of opportunity by directing finance toward people and enterprises that form the backbone of Zambia’s food systems.
“We extend our sincere appreciation to the Government of the Republic of Zambia, particularly the Ministry of Commerce, Trade and Industry, for spearheading this initiative as the lead implementing agency,” Chuunga said.
Chuunga explained that the project secured funding through an agreement between the government and the International Development Association in December 2023.
He said Zanaco has committed resources to support participating financial institutions, businesses and the trade sector under the project.
Chuunga noted that the initiative has national reach, covering all provinces and 116 districts.
He said the project will support 1,400 small and medium farmers, 94 organisations through matching grants and 1,350 traders.
“The project is for the farmer who needs working capital at the start of the planting season, the cooperative that wants to expand and the small-scale trader supporting livelihoods across borders. Every level of the value chain benefits,” Chuunga said.
Chuunga also commended participating financial institutions for responding to a public call in October 2024 and completing a rigorous screening process.
He added that ZATP Phase Two goes beyond financing agriculture by strengthening supply chains, improving market systems, opening trade opportunities and building resilience for farmers and agribusinesses.
“Our approach is people-first, communities-first, Zambia-first. This credit line directly reflects that commitment, and we will ensure its benefits reach farms, markets and households dependent on agriculture for their livelihoods,” Chuunga said.
Mulenga said the programme’s key focus areas will improve productivity, strengthen competitiveness and open opportunities for innovation, job creation and sustainable economic development.
“The programme’s key focus areas will improve productivity, strengthen competitiveness and open doors for innovation, job creation and sustainable economic development. This is precisely why we are committed to partnering with the business sector,” Mulenga said.
He noted that the agricultural sector employs between 60 and 70 percent of Zambia’s workforce and remains a key driver of production and inclusive development.
Mulenga highlighted challenges faced by farmers, including reliance on rainfall, limited irrigation, market barriers and restricted access to finance.
He said uncertainty in market linkages and fluctuating prices remain significant barriers to productivity.
“We are not simply providing credit. We are enabling competitiveness for Zambian agribusinesses in both domestic and international markets. This is a national priority and a source of livelihood for millions of our people,” Mulenga said.
Gold Makayi, the project lead, said the initiative aims to strengthen Zambia’s agribusiness sector and create sustainable employment.
“Our targets include supporting 1,400 producer organisations, 1,750 SMEs and creating 12,554 full-time equivalent jobs that will remain even after the project ends in December 2028,” Makayi said.
Makayi explained that the project has three main components.
He said the first component, Market Connect, provides technical assistance and matching grants, with funding structured on a 60/40 basis between the project and beneficiaries.
Makayi said the second component, the Line of Credit, provides financial assistance to agribusiness firms that have already received Market Connect support.
He explained that entrepreneurs can access the funds directly through commercial banks or through a structured process designed to strengthen banks’ confidence in applicants.
“This support is free and specifically designed to respond to the needs of agribusiness entrepreneurs,” Makayi said.
Makayi said the third component focuses on promoting trade and agribusiness by addressing challenges in importing and exporting goods.
He explained that it supports the government’s Coordinated Border Management initiative and the operationalisation of the AfCFTA Secretariat, helping businesses access regional markets while protecting local enterprises.
Makayi added that the project also provides business development services, managerial training, technology adoption, business incubation, youth agribusiness development, centres of excellence, product certification, food safety support and export licensing.
He said the project has been effective since March 5, 2020 and has already engaged several banks, with more expected to join the line of credit initiative.
“Success will mean that beneficiaries can use these funds to increase productivity, improve product quality and remain competitive in the market,” Makayi said.
Bonwell Sitwala of Palabana Dairy Cooperative said the cooperative has recorded significant growth in milk production and revenue through partnerships, infrastructure investment and innovative practices.
Sitwala said the cooperative was established in 1999 with 48 farmers who joined together to improve dairy production.
He explained that milk production has steadily increased to 7,000 litres per day, while revenues doubled to 36 million by the end of 2025.
Sitwala said women account for 33 percent of members while youth represent nine percent.
He noted that the cooperative has partnered with the Ministry of Fisheries and Livestock for mandatory animal health programmes, as well as feed suppliers and the JCT Dairy Development Zambia Project.
Sitwala said the project supports farmers by providing high-yield breeds and semen straws for artificial insemination.
He added that the cooperative is exploring value addition through long-life milk and plans to expand into regional markets including Malawi.
Sitwala welcomed the new line of credit, describing it as a milestone that will enable the cooperative to scale operations and strengthen Zambia’s dairy sector.
Zama Buku, co-founder of Cherry Pick, said the agro-processing company was established in 2016 after the founders began selling excess produce to supermarkets and packaging unsold goods.
Buku explained that the company has invested heavily in product packaging and quality to meet both local and export market standards.
She said the company received a grant from Fit and Prospero in 2024 and obtained product certification from ZABS.
Buku said sourcing produce from small-scale farmers presents challenges due to inconsistent quality.
She explained that Cherry Pick developed the Agro Chain 360 platform in partnership with Bongo Hive and Standard Chartered Bank to monitor production, ensure traceability and connect farmers to the company.
Buku said the company has recorded 56 percent year-on-year revenue growth.
She added that Cherry Pick has also received support from Market Connect, Prospero, Standard Chartered Bank and Bongo Hive, while the brand has been trademarked with Pakra.
Buku said the company promotes healthy eating, reduces food waste and creates employment opportunities while aligning with the United Nations Sustainable Development Goals 2 and 3.
She said the support received has enabled the company to operate a fully functional ZABS-certified factory.
“We are excited to expand further and empower more farmers and communities,” Buku said.
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