DBZ disburses ZMW47 million in loans, strives to grow its asset base
The Development Bank of Zambia has this year disbursed a total of ZMW47million to the private sector, Bank Managing Director Jacob Lushinga said.
He further stated that DBZ will continue to drive its mandate to provide short, medium and long-term finance to support Zambia’s economic development strategies for growth, wealth and job creation, infrastructure development, improved service delivery and overall poverty reduction. This he said during the International Trade Fair in Ndola.
Lushinga said the development bank is also mandated to provide technical assistance and advisory services for the purpose of promoting economic development, which is in conformity with the priorities set in the national development plan.
He cited that it must be made clear that the operations of the development bank are a little different from those of commercial banks. As a development finance institution, DBZ focuses on bridging the gaps created by private financial institutions which mostly prioritise commercial profit driven activities over economic transformation initiatives.
“This is so because projects that could contribute to economic transformation involve huge sums of money with long maturation periods, which require long term finance to support the expansion of productive capacities, as well as infrastructure development that underpins industrial activities and reduces bottlenecks,” Lushinga said.
Lushinga narrated that some of these huge development projects poses a huge risk that commercial banks usually prefer to avoid. And as such, the funding of economic transformation projects by DBZ are a plus and are key to economic development because they produce a lot of positive externalities, with much greater social returns.
DBZ’s breakdown of disbursed funds to the private sector is ZMW40million towards the manufacturing sector, ZMW5million towards the agro–processing, ZMW755,000 towards tourism, ZMW750,000 towards education sectors, with other various sectors getting about ZMW40,000, Managing Director Jacob Lushinga narrated.
“From the breakdown, it is clear that the Bank directed a lot of resources towards promoting industrialization in the manufacturing industry,” Lushinga said.
The Trade Fair theme fitted well with what the development bank does, in providing tailor made financial and advisory services to the private sector, focused on supporting them in the implementation of their industrialization plans.
All this aligns with Seventh National Development Plan - SNDP and other specific products and services that the Bank offers to the private sector like project finance, trade finance, leasing finance, wholesale lending, business advisory services, equity participation and working capital facility.
“The development bank will continue playing an enabling role in promoting private sector-led industrialization because we believe this is the most viable route towards achieving our mandate,” he stated.
DBZ was established in 1972 and has been on a drive to grow its balance sheet to become a major player in the Zambian lending market. The bank reported in 2017 that it had secured four (4) lines of credit amounting to USD117million.
These were to be used for onward lending to key sectors. The lines of credit were with China Development Bank – CDB for USD30 million, the Africa Development Bank – AfDB for USD50million, National Pension Scheme Authority – NAPSA for ZMW173million (about USD17million) and the Industrial Development Corporation of South Africa Limited for USD20million.
Some of the key projects financed by DBZ in the last three years include Matthanian Chicken processing ( in Southern Province), LC & DK Chickens Investment ( in Lusaka), Kasama Milling ( in Northern Province), Heinrich Park Mall ( in Luapula province) and Nomads Court ( in Lusaka).