Credit to private sector in Zambia has increased by three percentage points in the past four years due to improved capital inflow, Zambian Daily Mail reported Tuesday.

U.S. Agency of International Development Zambia Mission Director James Bednar was quoted as saying Zambia's credit to the private sector has expanded notably from 6 percent of GDP to almost 9 percent.

He told senior bankers at a meeting held here on how to earn profits and manage risks in small and medium enterprises and agricultural lending that the flow of capital is the lifeblood of any economy and it is essential to the survival of the private sector.

He said there are a number of obstacles to growing the country's loan portfolio citing lack of information, volatile commodity prices, underdeveloped finance and management on the part of small medium enterprises and high transaction costs.

Access to innovative capital products are key to unlock Zambia's vast economic potential, he said.

Bednar said that international studies show that an increase of 10 percent in the level of credit could reduce the poverty ratio by at least 2.5 percent.

Source: Xinhua