How new investments spark hope for Zambia’s small businesses

In the sprawling townships of Zambia’s capital Lusaka, the hum of metalwork and the clatter of car repairs can be heard from some of the country’s many small businesses. Artisans like George Tembo, a metalworker in the settlement of Kalingalinga, and Michael Kapiji, a mechanic in the city’s bustling Panganani Road, are part of the backbone of the economy. They train apprentices, serve local customers and sustain entire households. Yet both men share the same frustration: access to affordable finance remains out of reach.

“Our formal banking system, with its rigid requirements and high interest rates, feels like an impenetrable fortress,” Tembo says. “I dream of expanding, but without capital, those dreams remain stuck in my workshop.”

Kapiji echoes the sentiment. He imagines turning his crowded garage into a skills hub for unemployed youth, offering training in traditional mechanics and new technologies such as auto-electrics and electric vehicle repair. “The potential is here,” he says, “but we need investment to unlock it.”

That investment might just have arrived. The Government of Zambia has launched Growth Investment Partners Zambia (GIP), a platform designed to revolutionise financing small and medium enterprises (SME). Backed by an initial $ 70 million, the programme aims to bridge the financing gap that has long constrained SMEs.

“SMEs are very important to our country, to any economy,” President Hakainde Hichilema said when the platform was launched in Lusaka in July. “Some of the world’s best-known brands, like Toyota, began as family businesses. We are working to grow our economy, and we cannot ignore this sector.” In 2021, Zambia’s government had created a ministry to promote the development and growth of cooperatives and SMEs, the Ministry of Small and Medium Enterprise Development. 

International funding

GIP Zambia is geared towards a long-term partnership. Alongside the Zambian government, key partners include the development finance institutions of UK and Sweden, British International Investment (BII) and Swedfund, as well as Zambia’s National Pension Scheme Authority (NAPSA). Together, they plan to deploy more than $ 300 million in investments over the next 15 years.

The UK has pledged to mobilise £ 150 million ($ 200 million) of private investment into Zambian SMEs as part of a broader compact to attract £ 2.5 billion ($ 3.35 billion) into mining, minerals and renewable energy. “We see Zambia’s economic future with confidence and believe that inclusive growth can be built by investing in SMEs,” said British High Commissioner Rebecca Terzeon.

For policymakers, the stakes are clear. SMEs already contribute more than 70 % of Zambia’s GDP and account for nearly 90 % of employment. Yet many operate in the informal sector and struggle with barriers to credit, modern technology and reliable markets. By addressing these constraints, GIP Zambia is intended to stimulate growth and reduce poverty and inequality.

Analysts note, however, that financing alone will not be enough. To succeed, the platform must be paired with policies that strengthen value chains, improve training and support digitalisation. 

For entrepreneurs like Tembo and Kapiji, the initiative offers a glimpse of new possibilities. Tembo hopes to modernise his workshop and create more jobs in his community. Kapiji envisions apprentices gaining not just mechanical skills but also confidence and purpose. “With the right tools and training,” he says, “we can transform lives. Success is not just fixing cars or welding gates – it’s building futures.”

Derrick Silimina is a freelance journalist based in Lusaka, Zambia. He focuses on Zambian agriculture and sustainability issues. 
derricksilimina@gmail.com