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ZAMBIA, FINANCIAL INSTITUTIONS Banking services for all Zambians SUPPORTING THE GROWTH OF ZAMBIA’S LEADING BANK COMPANY Zanaco - Zambia National Commercial Bank PLC SECTOR Financial Institutions FMO INVESTMENT USD 52.5 mln debt “FMO WAS THE FIRST INTERNATIONAL FINANCIER SUPPORTING ZANACO IN ITS GROWTH STRATEGY TO BANK THE UNBANKED“ Martyn Schouten, CEO Zanaco With the largest distribution network in the country, Zanaco -the ‘People’s Bank’- is Zambia’s leading bank bringing financial services to over 800,000 customers in 90 of the 102 districts. Through its financing, FMO supports Zanaco’s growth strategy. The Zambian bank focuses on increasing the access to financial services for the unbanked, growing its agricultural client base and developing the Small and Medium-sized Enterprise (SME) market. UNDERDEVELOPED FINANCIAL SECTOR With a population of 14 million and GDP per capita of USD 1,400 Zambia is a relatively stable African economy with a positive economic outlook. Yet, development of the financial sector remains low, and with credit to GDP ratio of a mere 10-15%, it is even lagging behind Sub-Saharan Africa standards. At the time of financing, 80% of the population was unbanked, the availability of credit was low, and interest rates high; hampering private sector development. This created a growth opportunity for a solid bank. In part due to Zanaco’s contribution, by 2014 the level of unbanked people was already reduced to 66%. COUNTRY: ZAMBIA SEIZING OPPORTUNITIES Zanaco was established in 1969 to service the financial needs of the Zambian economy and has since evolved into a leading bank nationwide. Founded as a state-owned bank, it was privatized when Rabobank Financial Institutions Development acquired 49% in 2007 of which 3.4% was onsold to a nominee of Zambia National Farmers Union. Local investors obtained a further 25% in a successful IPO in 2008. This provided Zanaco with the opportunity to transform itself into a universal bank by providing a wide variety of financial services, whilst leveraging its historically strong position as the People’s Bank. Supported by successful innovations in the field of financial inclusion, such as XAPIT mobile banking, instant account opening and an agent banking model, Zanaco is able to cover 90 of Zambia’s 102 districts and reached 800 new customers per day at the time of the financing. As many of their customers are first-time users of the formal banking system, Zanaco has a “Financial Fitness” training program in place under which the financial literacy of 34,275 people has been improved. AGRICULTURE AND SMEs Zanaco is a universal bank and its customers are fully representative of Zambia as a whole, with a strategic focus on agriculture and SMEs. As a leader in food and agriculture finance, Zanaco serves the whole value chain. Their top clients are large professional farms and producers, generating employment and contributing to efficient and reliable food security for Zambians. At the base of the pyramid they reach small scale and emergent farmers, supported by their co30 operation with the Zambia National Farmers Union. In 25 addition, Zanaco is growing its SME segment by ensuring 20 access to finance. entrepreneurs have correct training and COMPANY FMO INVESTMENT NAME Zanaco - Zambia National Commercial Bank PLC SECTOR Financial Services TOTAL ASSETS* USD 1.040 bln INVESTMENT AMOUNT USD 52.5 mln NUMBER OF LOANS 3 YEARS OF INVESTMENT 2008, 2009, 2011 PRODUCT Senior Loans *as per 2014 IMPACT AND PERFORMANCE Reaching 800,000 customers across Zambia Universal banking strategy with a specific focus on SMEs and Food & Agriculture. 15 By providing finance to financially solid 10 and responsible local banks, FMO supports the growth of the 5 local financial sector. The banking sector is the engine of private sector develop0 ment. FMO provides senior loans to be used for on-lending to Zambian enterprises. Loan portfolio (USD mln) 30 600 500 25 400 20 300 15250 200 10 100 5 empower entrepreneurs to build a better world. We invest in sectors where we believe and agribusiness. Alongside partners, we invest in the infrastructure, manufacturing and www.fmo.nl 600 500 400 300 600 392 26% 22% 23% 24% 24% 24% 2009 2010 2011 2012 2013 2014 Exchange rate as at 31st December 2014 was ZMW 6.410 our contribution can have the highest long-term impact: financial institutions, energy 23% 24% 490 2009 2010 2011 2012 2013 2014 developing countries and emerging markets for more than 45 years. Our mission is to 22% FMO is one of the larger bilateral private 20%sector development banks globally. 361 541 0 FMO is the Dutch development bank. FMO has invested in the private sector in 0 services sectors. With an investment portfolio of EUR 8 billion spanning over 85 countries, 26% 510 Return on Equity 200 30