Maravi

Limited use of financial services worries Magande

Limited use of financial services worries Magande
By Mutale Kapekele on Livingstone
Thursday September 25, 2008 [04:00]

THE limited use of financial services in developing countries has become an international concern, finance minister Ng’andu Magande has said. And Bank of Zambia governor Dr Caleb Fundanga said the government has set a target of increasing the level of financial services from 48 per cent this year to 50 per cent by the end of 2009.

Addressing the second African Rural and Credit Association (AFRACA) central bankers’ forum in Livingstone on Tuesday, Magande said it was worrying that many people did not have savings accounts and can therefore not receive credit from financial institutions.

“Despite the broad consensus on the importance of financial inclusion as a poverty alleviation tool, it is estimated that between two and three billion people around the world are still excluded from access to financial services,” Magande said. “The situation is particularly dire in the developing countries where often the majority of the population is excluded from the formal financial sector. This has become an international policy concern.”

He said access to financial services had the potential to economically and socially empower low income groups and micro finance institutions.

“This can help them (low income groups) to better integrate into the economies of their countries,” said Magande. “Access to financial services also actively contributes to their human and economic development, to the economic growth of the countries where they live, and to the social safety nets that can help protect them against adverse economic shocks.”

And Dr Fundanga said the government has targeted to increase the level of access to financial services to 50 per cent by the end of next year following the Finscope Demand-Side Survey conducted in 2005.

He said key findings in the survey were that 90 per cent of the rural adult population in Zambia found bank charges unaffordable.

And Dr Fundanga said there was need to promote financial inclusiveness for the rural communities to effectively participate in development.

“African financial institutions should, through their experiences and knowledge, find ways of how best to promote financial inclusiveness, particularly among rural communities who have not been fully integrated in the financial systems of most of our countries,” said Dr Fundanga. “This entails that they are not effectively participating in economic growth that is being experienced in these countries.”

Labels: AFRACA, BANKING, CALEB FUNDANGA, MAGANDE

posted by MrK @ 6:55 AM