Venture Capital Funds seek to provide finance to enable businesses to start-up, expand or restructure through the use of equity and quasi-equity instruments such as preference shares, convertible debentures, and shareholders loans that reflect the risk and reward in investing in such businesses. Furthermore, given the relatively high interest rates prevailing, debt financing is not easily available to start-up and other emerging enterprises because they generally lack the collateral, track record, or earnings required to get loans. To this effect, venture capital funds can be essential to these enterprises as they are a combination of equity and professional know-how. To be attractive investment vehicles, venture capital firms must be able to deliver a rate of return that is more attractive than those available in markets for publicly traded stocks and other securities. Mr Chairman, in line with the workshop theme, “exploring and creating financial opportunities”, it should be noted that the financial sector in Zambia is considered relatively under-developed and has had limited reach to all sectors of the economy. A 2005 study by Finmark Trust revealed that only 33% of the total population in Zambia had access to financial services. The survey also revealed that most Zambians prefer to invest in nonfinancial instruments such as a businesses, livestock, land or agricultural equipment. In recognition of the strategic importance of the financial sector to the country’s development and poverty reduction efforts, the Zambian Government launched the Financial Sector Development Plan (FSDP) in 2004 to address weaknesses that had been identified in the financial sector.
Sources: Statistics Sweden and the Riksbank  BIS central bankers’ speeches  15  Figure 11. Lending to households and companies Annual percentage change, seasonally-adjusted 20  20  Lending to households Lending to companies  15  15  Total  10  10  5  5  0  0  -5  -5  -10  -10 99  00  01  02  03  04  05  06  07  08  09  10  11  Source: The Riksbank  Figure 12. Market surprise at repo-rate decision Basis points 50  50  0  0  -50  -50  -100  -100  -150  -150 Change in the repo rate  Feb 07 Mar 07 May 07 Jun 07 Sep 07 Oct 07 Dec 07 Feb 08 Apr 08 Jul 08 Sep 08 Oct 08 Oct 08 Dec 08 Feb 09 Apr 09 Jul 09 Sep 09 Oct 09 Dec 09 Feb 10 Apr 10 Jul 10 Sep 10 Oct 10 Dec 10 Feb 11 Apr 11 Jul 11 Sep 11 Oct 11  Market surprise  -200  -200  Note. The market surprise is measured on the basis of the change in the interest rate for a 1-month STINA swap in connection with the publication of the repo-rate decision. Sources: Reuters and the Riksbank  16  BIS central bankers’ speeches  Figure 13.