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Embassy of SwedenLusaka, Zambia

Local time 12:23 AM

Sweden and UNCDF partner to improve financing for MSMEs

20 Oct 2020

Solving the financing gap for MSMEs in Zambia with innovative financial services

UN Capital Development Fund (UNCDF) and the Swedish International Development Cooperation Agency (Sida) are launching today a new partnership to address the challenges Micro, Small and Medium Enterprises (MSMEs) face in Zambia using digital technologies when they need credit or capital to run and grow their business.  Other guests at the event will be government ministries, commercial banks, and innovation hubs that work closely with MSMEs.

The service offerings that will be set as a result of this new partnership target entrepreneurs like Mary who trades millet and sorghum with merchants in northern Zambia, and easily keep track on her orders, customers and suppliers through her mobile phone. Periodically, she supplies buyers from across the border in the Democratic Republic of Congo; at other times, she does not have the capital to purchase her grain from farmers. This impacts her business, especially if she has orders pending. A lack of capital or credit is an issue many MSMEs face that prevents them from meeting their daily needs and growing their businesses.

“We are pleased that Sweden has extended its long-standing partnership with UNCDF into Zambia. This partnership stems from our common vision of building inclusive digital economies that leave no one behind in the digital era. Our partnership aims to support the MSME sector in Zambia with innovative financing instruments. Digitalizing financial services for MSMEs will impact under-served segments such as women and youth and contribute to Zambia's development” said Henri Dommel, UNCDF Director Inclusive Finance.

Through the project, the two organizations aim to increase access to and the usage of credit facilities such as Pay-as-you-go solutions for digitally-enabled MSMEs in sectors such as finance, energy, agriculture and trade. This will improve the services they offer and the reach of those services.

MSMEs are a large sector in Zambia’s economy, accounting for 88 percent of employment. As such, they bring stability to the economy and enable Zambians to earn decent wages and engage in decent work. Therefore, the need to strengthen the MSMEs’ delivery of products and services to those in key population segments such as rural people, women and youth is important to sustain economic activity. By using digital means, these products and services can better reach all sectors of the population in all parts of the country.

UNCDF will work with MSMEs and enable them to leverage the digital financial services ecosystem that has been strengthened over the last six years. The numbers are telling with active digital finance users increasing from 2 percent of the population to 44 percent of the population between 2014 and 2019. The technical assistance offered to MSMEs will also capture how these businesses adapt to the post-Covid business environment. UNCDF and Sida aim to work with businesses that proactively work with gender equality, and inclusion of youth in their businesses, to ensure they can better succeed.

Quote from Sida

MSMEs in Zambia are the backbone of the economy but face challenges in access to finance and business management, leading to a “productivity gap said Ms Susanna Hughes, the Head of Development Cooperation at the Embassy of Sweden in Lusaka. “We believe that digital financial services can reduce this gap and contribute to poverty reduction, improved livelihoods and economic growth. We also believe that digitally enabled MSMEs are really important in providing services – and job opportunities that benefit women and young people.”

About Sida

The Swedish International Development Cooperation Agency, Sida, is Sweden’s government agency for development cooperation. Sida works on behalf of the Swedish parliament and government with the goal to enable people living in poverty and oppression to improve their lives. To achieve this, Sida collaborates with actors from civil society and universities as well as the public and private sector. The objective for Swedish development cooperation with Zambia is to contribute to reduced inequality and strengthened resilience, greater respect for human rights, democracy and the rule of law, and economic development that is inclusive and sustainable in terms of the environment and climate.

For more information, visit or follow @Sida and @SwedeninZM on Twitter. 



For more than 50 years, the United Nations Capital Development Fund (UNCDF) makes public and private finance work for the poor in the world’s 47 least developed countries in Africa, Asia and Latin America. With its capital mandate and instruments, UNCDF offers ‘last mile’ finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development. Since 2015, UNCDF has been a local presence in Zambia, focused on implementation of projects that address the needs of the 40% financially excluded. These projects are grounded in digital solutions to improve financial inclusion, address energy and resource needs at household level, and improve accessibility to goods, services and markets that help them sustain their livelihoods or improve their lives.

UNCDF has provided a mix of grants and technical assistance to policymakers, financial service providers, civil society and users of digital finance in order to expand access to and usage of services that contribute to achieving the Sustainable Development Goals.

For more information, visit or follow @UNCDFdigital


For more information regarding this project and UNCDF’s activities in Zambia, please contact Mali Kambandu at


Last updated 20 Oct 2020, 3.09 PM