Bank of Zambia to introduce third-party banking
By Nawa Mutumweno – Financial institutions in Zambia will soon carry out branchless banking through the use of third-party agents to broaden access to financial services by the majority of citizens, the central bank has said.
According to Bank of Zambia (BoZ) governor Michael Gondwe, regulations have since been developed to allow retail outlets and petroleum service stations to carry out the services on behalf of the financial institution.
‘’It is expected that once the process is completed, financial access by our people will improve and further contribute to financial deepening,’’ he said during the opening of the National Savings and Credit Bank (Natsave) Lumwana Branch in Solwezi, north-western Zambia.
Plans are also underway to establish a unified collateral registry which will record all registrations of charges on movable and immovable properties created by borrowers to secure credit.
The registry will provide information on the existence of relationships between lenders and borrowers in relation to movable and immovable collateral.
‘’Overall, the expected benefit will be increased access to loanable funds as the registry will, among other outcomes, bring about reduced risk in lending, increased competition among financial services providers which should be reflected in lower lending rates,’’ he elaborated.
The development will be beneficial to small and medium-scale enterprises (SMEs). There is need for financial institutions to speed up the provision of banking services to rural communities as demonstrated by Natsave bank that has increased its footprint to 33 branches which are mostly in rural areas to support the growth of rural communities and SMEs.
‘’Natdave is leading as a major partner to the SME sector, which increasingly is being described as the future of Zambia’s economic growth,’’ he said.
