BUUMBA CHIMBULU writes
BANK of Zambia (BoZ) is seeking ways of linking village banking and savings groups to formal financial market as a way of expanding financial inclusion.
BoZ Governor Denny Kalyalya said that new informal financial assemblages, such as village banks and savings groups service providers had emerged in both the rural and urban areas following the launch of the National Financial Inclusion Strategy in 2017.
Dr Kalyalya said this therefore called for linkages with the formal financial sector.
He was speaking at the official launch of the 2019 World Savings Day under the theme: ‘Be Money Smart: Savings Give Life a Lift!’
“As both formal and informal financial service providers are agents of financial inclusion it is important for us, the regulators, to seek effective ways of linking the two types of players with a view to reducing informality as we expand financial inclusion,” Dr Kalyalya said.
Dr Kalyalya said BoZ was collaborating with SaveNet, to develop channels to link informal savings groups to formal financial services providers.
He said that was in recognition of the importance of formal financial inclusion in supporting economic growth.
“According to SaveNet data, at the end of 2018 there were 15,700 savings groups in Zambia, with cumulative savings amounting to K53.1 million.
“This points to a good opportunity for the formal financial service providers to mobilise deposits,” Dr Kalyalya said.
The Governor observed that a number of regulated financial service providers and mobile money operators had already started designing products aimed at tapping into this market.
He hoped that this move would accelerate the transition of informal groupings into the formal financial sector and enable more people gain access to a wider range of quality and affordable financial services.
Dr Kalyalya said financial service providers had to provide the products and services that the people wanted and not what providers thought they wanted.
“Recognising that financial exclusion is more prevalent in rural areas, the Bank of Zambia has adopted various initiatives to improve rural financial inclusion in line with the national Rural Finance Policy and Strategy of 2012,” he said.