Rural Finance


Various projects currently operate in the country to build up the capacity of farmers and farmer groups and associations, and to link them to firms providing credit and access to markets. Currently, the strategy to intensify smallholder production relies largely on the increased outreach of the input credit and marketing services provided by commercial companies or out growers under contract farming arrangements.

However, many of these companies if not all, are constrained by limited resources and face considerable difficulties in accessing finance required to expand their out grower/contract farming activities. This has placed a limit on the extent to which contract farming can contribute to agricultural production.

Rural Finance Objectives

The mandate of DBZ is to contribute to the development of economically viable enterprises in Zambia. The broad objectives are to select projects that contribute towards:

  • Foreign exchange savings and / or earnings.
  • Development of local technology and of manpower skills.
  • Creation and expansion of permanent employment.
  • Use of local raw materials.
  • Development of a robust indigenous Private Sector.

Terms and Conditions of the Facility

(terms subject to change without notice)


The line of credit, presently amounting to United States Dollars Four Million (US$4, 000, 000.00) will be availed through PFls. The amount is subject to annual review and will be increased with demand. The maximum exposure to a single borrower or group is US$500, 000 or its Zambian Kwacha equivalent.


Private contracted small scale farming, agricultural marketing and processing companies and out growers covering:

  • Activities that will lead to expansion or intensification of smallholder based contracted production.
  • Operations in agriculture, livestock or fisheries sub-sectors, handicrafts and other rural activities.
  • Procurement of seasonal inputs that the agro-companies or bodies will deliver on credit to their contracted smallholders. Procurement of small investment items such as irrigation pumps and livestock that the agro-com- ponies or bodies will deliver on credit to their contracted small holders.


Twelve (12) months or less on a renewable basis. This may be extended to twenty four (24) months in special circumstances.


PFls can access the loans for on lending to private entrepreneurs in either US Dollars or Zambian Kwacha.


The PFI is free to call for collateral as it deems fit.


The interest rates will be determined by the PFls, which will reflect the cost and risk of the project. The PFI is free to determine its mark-up on the loan or advance to the final beneficiary. The Apex w i I I , however, provide the funds to the PFIat the 12 months London Inter-bank Offer Rate (LiBOR) plus 1 % to the PFls. For local currency, the funds will be availed at the 364 days.

Applicants are encouraged to negotiate the interest rates at which they will borrow the funds from the PFls.


The Credit Facility is a conduit for participation by local financial institutions in rural development and extension of their services to hitherto unbanked clientele, which should assist them explore new opportunities for providing other financial services.


Contracting/out-grower companies and marketing/agro-processing companies are required to prepare bankable business plans for the project requiring financing.

The proposal, together with the application, should be submitted to the PFI, with a copy to the Apex Unit at the Development Bank of Zambia. The PFI will evaluate the application and may request for additional information.

The Apex will work closely with the PFI and may link potential sub-borrowers and PFls at the lending stage.

On approving the application, the PFI will request the Apex for the disbursement of funds.