- “FSPs will continue to customize products and services to suit the financial services needs of the different segments of the economy,”
By BUUMBA CHIMBULU
VILLAGE banking groups should embrace digital payment platforms as a way of avoiding theft and loss of funds, says Bankers Association of Zambia (BAZ) Research and Communications Officer, Precious Kalusha.
Ms Kalusha indicated that embracing digital payment platforms would enable the groups avoid theft and loss of funds.
She said the groups could leverage on other products and services within the financial services sector for efficient transactions.
Ms Kalusha said Financial Service Providers (FSPs) had continued to develop products to meet the need of groups such as introduction of village banking accounts.
“FSPs will continue to customize products and services to suit the financial services needs of the different segments of the economy,” she said in her write up on Transforming Industry, Developing Zambia.
Ms Kalusha advised village banking groups to avoid giving out loans beyond one’s repayment capacity.
She stressed the need to ensure they agreed on clear rules and a constitution with guidelines on how to make contributions, borrowing and repayment terms, period of the cycle and share outs.
Members of the group, she said, should have a deeper knowledge of each other’s character and integrity, self-selected and trustworthy.
Ms Kalusha warned that the groups if not managed properly, could result in loss of funds at an individual level or as a group.
“There are a lot of stories on various media platforms regarding members who borrow large amounts from village banking groups and fail to pay back,” she said.
Ms Kalusha however acknowledged that such groups were helping members with working capital for businesses and investments as well as for other financial needs
“Ensure you have an elected leadership or management team from among the members to help run the affairs of the group. This team should ideally be subject to annual elections and limit of tenure and embrace governance protocols,” she said.