Village banking nets over $10,000 investment lots

Village banking nets over $10,000 investment lots
By BUUMBA CHIMBULU
VILLAGE Banking has emerged as one of the best performing assets of 2021, with some high profiled groups saving in foreign currency with fairly decent balances of a minimum of US$5,000 to US$10,000 as beginner investment lots.
This model has solutioned for many personal and small business segments that seek liquidity to fund needs while not worrying about collateral requirements, according to the Kwacha Arbitrageur Magazine.
The magazine indicated that cycles were preferably short in duration ranging from six to 12 months allowing maturity and pay-outs after which other which other cycles commence.
Access to capital has remained a key hurdle in Africa generally because banks still ask for physical or cash collateral as such many are incapacitated from borrowing.
Zambia has one outstanding investment option that surpassed traditional risk free assets, village banking.
The investment options annual interest yield of above 120 percent qualifies it for most lucrative asset even when adjusted for inflation.
“Village banking players practice diversification by belonging to multiple groups that offer different benefits and investment pay-outs.
“At a time exchange rate risks were high some high profiled groups saved in foreign currency with fairly decent balances of a minimum of US$5,000 to US$10,000 as beginner investment lots,” the Magazine stated.
It stated that despite central banks approval of the product in the quest to encourage savings and promote financial inclusion, village banking remained unregulated and as such deposits had grown significantly.
The Magazine indicated that village banking had evolved from its traditional class of the lower tier ranging from marketeers to micro business owners in rural areas to inclusion of higher tier white collar classes that actively participate in savings and investments.
“Village banking is Zambia’s socially accepted banking model, understood at the most elemental level which has transcended various classes.
“And what makes it so powerful is that was developed and propelled by the country’s most effective business unit – the woman! It has created money and wealth for the banking and mobile money systems without them even realising it,” it stated.