Impact study : the remarkable example of EFC Zambia

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In order to provide small business owners with the financing they so often lack, Développement international Desjardins (DID) sets up, operates and is developing Entrepreneur Financial Centers (EFC) using its investment funds, strict operating methods and specialized solutions, and with the support of strong international partners. A 2012 impact assessment of EFC Zambia, the Entrepreneur Financial Center set up in Zambia in 2009, confirms that it is creating wealth and opportunities for small business owners and is contributing to the development of the middle class in that country. The study also deeply underscored the fact that this Entrepreneur Financial Centre, by providing financial services that are adapted to small businesses, is filling a pre-existing void. BIO supported the DID initiative with a EUR 1,5 million loan in 2013. Learn more about BIO’s investment here.

See the full report here.

Positive results and unexpected benefits

It is estimated that in Zambia only 10% of micro, small and medium enterprises have access to the financing they need to develop. "Money is the lifeblood of a business!", affirms Arthur Bhuku, one of the 14,000 clients of EFC Zambia, the financial center for entrepreneurs set up by DID in Zambia in response to this situation.

An impact study carried out in recent months confirms the pertinence of this institution on the Zambian financial scene.

EFC Zambia succeeds in filling the gap that previously existed in the financial services offered to small entrepreneurs by associating itself with solid partners and integrating rigorous practices that ensure the viability of the institution.

It also offers entrepreneurs the products and services they need at conditions that take into consideration the realities of their situation. "Obtaining a loan from the bank can take a over a month! For me, who has to travel in order to obtain parts for my business, that means that my visa has time to expire before I have the money I need to make the trip", explains the owner of a truck parts store and EFC client.

A key item in the services offered by EFC Zambia is housing finance, which enables entrepreneurs to acquire business premises, or buy or renovate a house, apartments to rent or even a school. "This product was an immediate success! One of the best decisions made by the EFC was to offer this new possibility to entrepreneurs", explains Moses Serenje, chief credit officer at the EFC.

Among the EFC's good practices, the share ownership program is undoubtedly the most innovative and attractive because it enables clients and employees of the institution to become part owners. "Being able to become a part owner of the EFC represents something more than a paycheque: it is a long-term benefit. It motivates people to participate in the growth of the enterprise!" affirms Sydney Kanyata, CFO at EFC Zambia.

Results that speak for themselves

Since its creation 2009, the EFC has experienced astounding growth while managing to keep its portfolio at risk under 3%.

Today women make up 42% of its clientele and there are members from all age groups.

In addition, almost half of its clients have already obtained more than one loan from the EFC and the amount of their loans increases at the same pace as the assets of their enterprise.

The EFC is not only a driving force behind job creation, it is also a source of pride, financial education, growth and autonomy. "Thanks to the EFC, not only has my enterprise prospered, but I have also been able to offer a good education to my children while maintaining my financial independence", proudly notes Jane Frances Mbalufu, agricultural producer and EFC client.

The EFC has also provided unexpected benefits. For example, by facilitating the financing of private schools which are welcome services in many communities that lack a public school. "Thanks to the EFC, I succeeded in building my school brick by brick, class by class. With the revenue generated by the school I even managed to pay for the schooling of nine orphans who would not otherwise have had access to education", explains EFC client Macpherson Mpundu.

The EFC is thus an indispensable and essential actor on the Zambian financial scene. By helping the country's small entrepreneurs fully assume their place in the socioeconomic development of their communities, it contributes to the vitality of both the social fabric and the local economy.