Mop up money circulating outside formal banking sector, says BAZ

Fri, 24 Mar 2017 13:35:54 +0000

By BUUMBA CHIMBULU

ZAMBIA has about K6 billion circulating outside the formal financial services sector which needs to be mopped up and placed in the banking sector, says Bankers Association of Zambia (BAZ).

BAZ Chairperson, Charles Mudiwa, observed that about 40 percent of the money issued by the Bank of Zambia, never made it to the banks and yet that was money which continuously circulated outside the banking sector.

“We are still a very cash-heavy society as a country. We currently have about K6 billion circulating outside the formal financial services sector,” he said.

He was speaking at a half-day sensitisation workshop for selected members of Parliament on matters of financial literacy and understanding the operations of the banking sector in Zambia.

Mr Mudiwa emphasised the need for legislative support from Government to ensure more funds were mopped up and placed back in the banking sector. “We appeal to the Government to put in place incentives that would increase the uptake of electronic payment platforms for people so as to move towards the attainment of a cash-light Zambia,” he said.

He said it was the aspiration of BAZ to ensure that over 90 percent of financial inclusion levels in Zambia was realised.

Mr Mudiwa further said that the banking sector was working on expanding its branch networks to rural areas through agency banking and digital payment channels. And First Deputy Speaker of the National Assembly, Catherine Namugala, said the workshop was well-timed as Parliament was currently reviewing the Banking and Financial Services Bill. Ms Namugala expressed concern at the lack of financial services and facilities in some rural parts of Zambia, adding that it was detrimental to attaining high­ levels of financial inclusion for citizens.

“Members of Parliament have been informed about plans to bridge the gap in access to finances and the information gap in financial literacy.

“Perhaps this workshop presents an opportunity to be informed by the financial sector players on why Zambia ranks lowly in the provision of financial services, especially in rural areas,” she said.