Zambia: Helping to bank the unbanked

Money Transfer

Samuel Tembo, at the helm of the Economic Empowerment Programme at Plan Zambia, insists that tangible things are underway to ensure that some unbanked rural Zambians are reached with services enjoyed by urbanites. “We were concerned at the financial barriers that prevent the poor from accessing financial services and proving that no one is too poor to save. ‘Banking on Change’ has brought financial inclusion to an otherwise neglected sector.”

Since time immemorial, exclusion of low income folks have persisted with mostly ‘linked’ people having easy access to finances. Half the world’s population has no access to banking services. Only one out of every five Zambians enjoys direct banking facilities. The need to bridge this financial exclusion gap has never been urgent than now.

Tembo suggests a two-pronged approach – individuals and group savings must be rewarded with easy credit as well as financial literacy.
In 2009, an initiative by Plan with funding from Barclays Bank helped set up award winning ‘Banking on Change.’

Plan Zambia has since been implementing community based micro finance programmes in two operational districts of Mazabuka and Chibombo, albeit on a small scale. With a target of 10,000 people, it exceeded expectations by enlisting 12,698 of which 72 percent were female.

Operating in 11 countries – Egypt, Ghana, India, Indonesia, Kenya, Mozambique, Peru, Tanzania, Uganda, Vietnam and Zambia, ‘Banking on Change’ put on the pedestal ‘savings led microfinance.’

About 25,000 village saving groups, each with about two dozen members or over half a million individuals got basic financial services. Based on this success, Barclays Bank promised more funding.

This year, the bank felt obliged to renew the mandate for a further three years to a tune of £10 million. The funding will go towards a holistic financial inclusion plan for young people; enhancing entrepreneurial skills, inculcating economic independence and helping them reap from own savings. Young people in Zambia and participating countries have good reasons to smile.

Chibombo, Chadiza and Mansa districts, though poles apart will be brought closer by a shared goal; being part of the second phase of ‘Banking on Change.’ Mr.Tembo exuded excitement at the launch of the second phase, saying previous funding from Barclays helped increase the culture of savings.