Maravi

Microfinance loans increase

Microfinance loans increase
By Fridah Zinyama
Saturday August 09, 2008 [04:00]

TOTAL loans in the Microfinance sector increased to over K300 billion from K11 billion in 2002 as at end June 30, 2008. According to Bank of Zambia (BoZ) Non-Bank Financial Institutions manager Musapela Phiri, the recognition by the BoZ of three tiers of Micro Finance Institutions (MFIs) has promoted financial inclusiveness in the country.

“The good policies that the bank introduced have encouraged more players to come on the scene to provide varied financial services to individuals who previously did not have access to financial services,” he said.

Phiri said some of the services provided by MFIs under these regulations include credit facilities, savings, linkage banking, in country transfers and any such other services as the central bank may prescribe.

He added that there had been an increase to K160 billion from K96 billion in the level of loans and leases in the leasing and finance sub-sector.

“This represents growing significance of the leasing sector in the economy,” Phiri said. “However, arising from a restructuring in the sub-sector, there was a noted drop in the level of loans and leases in the last two years.”

He added that the building societies had also improved considerably as the mortgage portfolio had increased to K123 billion as at June 30 this year.

“The increase in mortgages has been due to increased access to funds for onward lending through recapitalisations as well as lines of credit from commercial banks,” he said.

Phiri during the same period, deposits in the building societies sub-sector increased from K42 billion to K120 billion.

“This increase can be attributed to greater confidence in the sub-sector resulting from favourable macroeconomic environment and appropriate regulation and supervision of the sector,” he said.

Phiri added that BoZ would continue to pursue the improvement of the financial sector.

Labels: MICRO-FINANCE

posted by MrK @ 12:39 AM