Business Services for Investment and Growth Sector

About the Private Enterprise Programme Zambia (PEPZ):

Funded by UKaid, PEPZ supports the development of a thriving Zambian private sector in order to create job and income opportunities, increased investment and value addition in the local economy.

The core of the PEPZ value offer to potential partners is formulated under four headings:

  • Capital: Our cost-sharing financial intervention mechanisms designed to incentivise business innovation that will benefit Zambian Micro, Small and Medium Enterprises (MSMEs);
  • Capacity: Our internal expertise and our network of external specialist consultants who can help intervention partners design and implement solutions;
  • Connections: Our networks and contacts that allow us to facilitate business connections and transactions; and
  • Compliance: Our understanding of the formal and informal rules of focus sector markets means that we can help businesses to meet legal/regulatory requirements and client/consumer needs.

PEPZ works across four focus sectors. Each sector has its own overall strategic goal that shapes our work in that sector:

  • Food and Agriculture: To increase productivity at the farm level, promote value addition through processing and get more Zambian products into consumer markets
  • Mining and Mining Services: To increase the positive, sustainable and inclusive economic impact of the mining industry in Zambia
  • Tourism and Hospitality: To increase tourist numbers and spend in Zambia and increase the proportion of tourist revenues captured by local businesses
  • Business Services for Investment and Growth: To increase access to financial and non-financial business services and sources of finance that support growth-oriented Zambian businesses

In 2018, PEP Zambia entered into a partnership with Impact Capital Africa (ICA) Zambia, an initiative that aims to bridge the gap between impact investors and growth-focused firms looking to raise finance from US$50,000 to US$15 million or more. Culminating in an international conference held in Lusaka in October 2018, the inaugural season was very successful, bringing 28 SMEs into the investment space and linking them to 15 impact investors from the region and beyond.

Several months after the first ICA event in October 2018, ten Zambian businesses so far have raised US$65 million between them at the end of June 2019, and other companies are in active discussions with potential investors.

PEP Zambia contributes to the success of ICA Zambia by:

  • Identifying a pipeline of quality Zambian firms suitable for consideration by impact investors;
  • Ensuring these firms are well prepared for the process and de-risking that process for firms; and
  • Streamlining, simplifying and facilitating the entry of impact investors into the Zambian business space.

To follow up on the success of ICA 2018, PEPZ is working to ensure that there is a strong pipeline of SMEs presented at this year’s ICA which will be held in October 2019. We have lined up various activities and engaged different organisations that will work with the SMEs post ICA sign up, to the conference and beyond. If you are a Zambian registered SME interested in raising finance through the ICA platform, then do consider the eligibility criteria and application guidelines indicated below:

Criteria for Competitive Profiles:

SME profiles must meet the following criteria:

• SME profiles must indicate how the anticipated investment will impact social and/or environmental benefits as well as an increase in revenues.

• Applicants need to display sufficient management capacity to implement the intended project once the anticipated investment has been received.

• Profiles must address challenges existing in the external environment and how the applicant intends to address them. This can be done by using the United Nations’ Sustainable Development Goals (SDGs) that have been included in the SME profile template.

• Profiles must introduce some level of innovation in terms of an innovative business model, a new product or service, or a new way of addressing the constraints that keep SME from fully expanding.

Eligibility and Submission Guidelines:

Who may apply?

  • Zambian registered legal entity: All ICA participants must be registered with the appropriate authority as a legal entity in Zambia.
  • Tax registered and compliant: All intervention partners must be able to demonstrate that they are registered for tax and are in compliance with tax obligations.
  • Authorised business activity: All intervention partners must possess any relevant sector licenses or permits for the business activity outlined in the proposal.

ICA Zambia only works with businesses that bring:

  • Demonstrable environmental and/or social impact: All ICA participants must be able to demonstrate that their business delivers a positive environmental and/or social return as well as financial.
  • Convincing investment and growth plans: Investors will want to know how the additional cash coming into the business will be used to deliver profitable growth
  • Ticket Size: US$50,000 – $15m (or more)
  • Post Revenue: All ICA participants must have a track record (minimum of two years), be post revenue and able to demonstrate planned growth.
  • Strong management: Any potential investor wants to see current owners and a management team that are as investable as the business itself – this can come down to personal chemistry as much as qualifications or business experience.

Profile Submission Guidance:

  • Applicants should complete their ICA profile template in as much detail as possible. After PEPZ’s review, profiles will be sent to ICA for final review and feedback will be given to all applicants. Selected profiles will then be requested to sign a cooperation agreement and be given access to technical support such as introduction to investment advisers. 
  • PEPZ has a limited budget and ICA has limited slots for SMEs, so we are looking for high-impact investment projects that meaningfully benefit relatively large numbers of Zambian MSMEs. Competition for support is likely to be high, so be advised that only the most convincing, value-for-money and high impact projects will be on-boarded onto the process. Note all SMEs that submit profiles will be considered for ICA 2019.
  • Profiles need to be submitted by 18 July 2019.
  • Applications will be accepted on a rolling basis through up to 18 July 2019. Applications will be reviewed on a first-come, first reviewed basis.
  • PEPZ’s and ICA’s decisions on applicants selected for this year’s ICA season is final.

Success Stories

Future events

  • Impact Capital Africa

    Impact Capital Africa
    2019
    Bringing together established, growing Zambian businesses and impact investors
    Are you an established Zambian business looking for scale-up capital?