Thursday, October 29, 2009
By Chiwoyu Sinyangwe
Thu 29 Oct. 2009, 04:00 CAT
FINANCE minister Situmbeko Musokotwane has said the increasing number of commercial banks in Zambia is manageable as the Central Bank has enough regulatory and supervisory tools for monitoring.
Speaking during the Access Bank UK (United Kingdom) presentation on Tuesday night, Dr Musokotwane said the local financial sector was not likely to experience a crisis seen in the 1990s which was brought about by the proliferation of financial institutions.
The domestic financial sector has in the last few years recorded an average annual increase of over 30 per cent. And the Bank of Zambia (BoZ) has this year alone registered five foreign banks and two have since commenced operations.
At the height of the local financial crisis in the 1990, certain key commercial banks which included Meridien Bank and Credit Africa Bank were placed under liquidation, throwing a lot of depositors in anguish and agony.
“The BoZ governor Dr Caleb Fundanga was telling us that we have issued licences to five new banks, so it is going to be very competitive,” Dr Musokotwane said.
“I was at there in the 1990s; I was at the Central Bank when there were so many new banks that were licenced. Unfortunately many of them went under. And it was very stressful. It was a bitter experience to licence and then close them.
“People were coming to my office complaining bitterly that they had lost their money...I believe that we have learnt a lesson. Certainly, our regulatory framework and supervisory framework is much stronger now. So we are going to help you not to close so that you make business.”
Dr Musokotwane said entry of new commercial banks in the country would reduce the cost of lending through inducing competition.
He said despite the increase in the number of commercial banks, the government was committed to attracting new players, urging all institutions connected to attracting investments in the country to continue repositioning themselves in line with the desire of the government.
And Access Bank UK managing director Jemmy Simon said the Nigerian-headquartered bank would continue to deliver financial products targeted at real sectors of the economy.
Simon stressed that customers would continue to be central to the growth of Access Bank.