Thursday, February 18, 2010

BoZ calls on banks to open rural branches

BoZ calls on banks to open rural branches
By Mutale Kapekele
Thu 18 Feb. 2010, 09:40 CAT

BANK of Zambia governor Caleb Fundanga has called on banks to open branches in remote areas for the rural population to access financial services. And Access Bank has introduced the first-ever Visa Debit Card with a microchip and pin.

“Most banks in Zambia have concentrated their branch expansion in the already over-banked districts of our country like Lusaka,” Dr Fundanga said.

“We still have a number of districts with a lot of economic potential but without financial service providers. This entails that civil servants and other citizens in formal employment have to travel long distances and in some instances, a number of days before they can access their salaries.”

He said income-earning citizens in the informal sector like fishermen and farmers could not deposit their earnings in safe savings accounts due to the absence of bank branches.

“Most of our people cannot borrow loans to further create wealth by growing their projects,” he said.

“A number of them end up losing their income in fires, theft and other calamities. It is also common for hard working women to lose their incomes to their beer drinking husband who know where their wives keep their little savings.”

Dr Fundanga said it was a well-known fact that bank branch expansion programmes played an important role in increasing access to banking services closer to those who needed them and also improved competition among banks in Zambia while creating jobs.

“However, there is need to complement physical branch expansion with product innovation programmes that will capture a lot more people in the remote areas of the country,” he said.

He said the real challenge was for all financial sector players to play their honest part in enhancing savings mobilisation and to effectively channel the public’s savings to support financing of economic activities in all parts of the country.

“It is the Bank of Zambia’s expectation that these efforts, accompanied by the prudent risk management, will contribute to further deepening of our financial markets,” said Dr Fundanga.

“I challenge Access to open branches in places like Chilubi, Gwembe, Chavuma, Chiengi, Lufwanyama, Mufumbwe and several other places to tap into the vast potential these places possess.

This will not only improve financial inclusion but also provide you with new customers and thus a higher deposit base. I am certain that these places will be your most profitable centers as places like Lusaka will only yield narrow margins due to stiff competition.”

And Access Bank Board chairperson Caleb Mulenga has disclosed that the bank grew by 121 per cent in the last quarter of 2009.

“Access Bank’s performance in the fourth quarter of 2009 saw a remarkable growth of 121 per cent as compared to the third quarter results. This indeed was a significant stride for us,” Mulenga said.

“The Visa Debit Card to be unveiled today is the only one of its kind with safety and security of transactions due to chip and pin technology, currently the first on the Zambian market.

This card is globally accepted as a means of payment at over 29 million merchants and over one million ATMs worldwide, in over 220 countries. This no doubt uplifts Access Bank to global industry standards in banking and card services.”

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