Government's Bold K5 Billion SME Fund Set to Transform Zambian Business Landscape

In a major boost to Zambia's economic development agenda, the Bank of Zambia (BoZ) has unveiled an ambitious K5 billion Credit Guarantee Fund that will revolutionize access to affordable financing for Small and Medium Enterprises (SMEs) starting in 2026.

The groundbreaking initiative, announced by BoZ Governor Dr. Denny Kalyalya, demonstrates the government's unwavering commitment to empowering local entrepreneurs and driving inclusive economic growth across the nation.

Dr. Kalyalya revealed that the Central Bank has already fast-tracked internal approvals for establishing a Special Purpose Vehicle (SPV) to operationalize this transformative fund, which will unlock previously inaccessible credit opportunities for Zambian businesses.

Speaking at the 2026 Budget Symposium in Lusaka, the Governor outlined several progressive measures that underscore the government's sound economic management and forward-thinking policies.

In a decisive move to strengthen national economic sovereignty, Dr. Kalyalya announced that the Central Bank will reinforce the use of the kwacha in domestic transactions by year-end. This strategic policy will ensure that while businesses may quote prices in foreign currencies for convenience, all settlements must be conducted in kwacha—a measure that will bolster the national currency and enhance monetary stability.

Further demonstrating the government's commitment to protecting citizens' financial interests, the BoZ will issue comprehensive deposit protection rules for banking and financial services before December, significantly enhancing consumer confidence and reinforcing the stability of Zambia's financial sector.

The Governor's macroeconomic projections paint an encouraging picture of Zambia's economic trajectory under current leadership. Dr. Kalyalya confidently forecast that inflation will decline to the target band of 6–8% in the first quarter of 2026, a remarkable achievement from the current 12.3%—clear evidence of effective fiscal and monetary policy coordination.

Most impressively, Dr. Kalyalya highlighted that the kwacha has already appreciated by approximately 15% against the US dollar, a testament to the government's prudent economic management and the growing confidence of both domestic and international stakeholders in Zambia's economic future.

These bold initiatives collectively signal a new era of prosperity and financial inclusion for Zambian entrepreneurs, positioning the nation for sustained economic growth and development.