The United Kingdom’s development finance institution, British International Investment (BII), in collaboration with Zambia’s National Pension Scheme Authority (NAPSA) and Swedish development financier Swedfund, has launched a dedicated investment vehicle—Growth Investment Partners Zambia (GIP Zambia)—to provide tailored long-term capital to small and medium-sized enterprises (SMEs) in Zambia. The initiative aims to address a chronic funding gap in the sector by offering more accessible and flexible financing, primarily denominated in local currency.

GIP Zambia begins operations with an initial fundraising close of $70 million, comprising a $37.5 million contribution from BII, $17.5 million from NAPSA, and $15 million from Swedfund. The entity’s overarching ambition is to deploy over $300 million to approximately 150 Zambian SMEs over the next 15 years, thereby supporting job creation, economic diversification, and the development of Zambia’s private sector.

The investment strategy prioritises sectors identified as key to Zambia’s economic growth—namely manufacturing, agriculture, and financial services—with an added emphasis on inclusivity by targeting enterprises that are locally owned, led by women, or otherwise underrepresented in conventional capital markets.

SMEs form the bedrock of Zambia’s economy, contributing over 70% of gross domestic product and 88% of national employment, according to available economic data. Yet, access to capital remains a significant obstacle. More than 40% of SMEs surveyed by BII cited inadequate financing as a principal challenge to their growth and scalability. These constraints are often exacerbated by rigid bank lending criteria and the limitations inherent in traditional private equity funding, such as high minimum investment thresholds and short investment horizons.

GIP Zambia is intended as a structural response to these impediments. By offering patient capital with longer tenors, reduced collateral requirements, flexible repayment terms, and supplementary business development support, the initiative seeks to create conditions conducive to sustainable SME growth.

This newly formed entity aligns closely with Zambia’s strategic frameworks, including Vision 2030 and the Eighth National Development Plan, both of which underscore the importance of private sector development, employment generation, and structural economic transformation. The effort also builds upon the operational model of GIP Ghana, launched in 2023, which has already demonstrated proof-of-concept for a scalable financing approach across sub-Saharan Africa.

As mentioned in our interview with Christopher Chijiutomi, Managing Director and Head of Africa at British International Investment, during The Africa Debate hosted by Invest Africa Ltd last week, the role of blended finance is pivotal in bridging Africa’s capital access gap. Chijiutomi provided an in-depth perspective on the mechanisms through which development finance institutions can mobilise private capital and support long-term investment in local ecosystems. The full interview, Why Africa Needs Blended Finance – Chris Chijiutomi of BII Explains, offers further insight into BII’s regional strategy and the rationale behind initiatives like GIP Zambia.

Commenting on the launch, BII Chief Executive Officer Leslie Maasdorp stated that GIP Zambia represents a deepening of BII’s long-term commitment to building robust local financial ecosystems tailored to the needs of SMEs and entrepreneurs. He noted that catalytic development finance should work in tandem with domestic capital providers to enable real, inclusive economic transformation.

NAPSA Chairperson Shipango Muteto described the partnership as a strategic move that not only supports economic activity but also fortifies the long-term sustainability of Zambia’s pension system. By fostering SME growth, NAPSA anticipates a positive feedback loop that expands its contributor base and enhances fund resilience.

Swedfund Chief Investment Officer Marie Aglert echoed this sentiment, highlighting the unique value of providing local currency financing that aligns with the specific growth trajectories and cash flow cycles of Zambian enterprises.

GIP Zambia’s Chief Executive Officer Musonda Chipalo underlined the entrepreneurial energy present in Zambia, noting that while innovation and ambition abound, access to appropriate finance remains a bottleneck. The GIP Zambia model, according to Chipalo, is structured precisely to overcome these constraints by offering long-term, context-sensitive capital tailored to the specific requirements of Zambian SMEs.

In establishing GIP Zambia, the founding institutions aim to support a generation of entrepreneurs and business owners in building enterprises capable of driving inclusive and durable economic progress. Through domestic capital mobilisation and international collaboration, the initiative aspires to reshape Zambia’s financial landscape, strengthening the foundations of its future economy.