Fundanga bemoans lack of banks in rural areas

COMMENT - I can't follow. The money is lost to the Zambian economy, because farmers don't put it into bank accounts? What kind of weird thinking is that?

Fundanga bemoans lack of banks in rural areas
By Joseph Mwenda
Mon 07 Feb. 2011, 04:01 CAT

THE money paid to farmers during the last crop marketing season will not benefit the Zambian economy unless it is recaptured by the financial intermediators, according to the central bank.

In an interview on Friday, Bank of Zambia governor Dr Caleb Fundanga observed that 67 per cent of people in the rural areas who contributed significantly to the much talked about bumper harvest did not have access to financial services.

“There are a lot of savings in our country which currently are not being mobilised by the banking system, so if we can mop them up… for instance look at agriculture. This year, we said we had a bumper crop. That means we have pumped trillions of kwacha into the agriculture sector but is that money going to be saved?” Dr Fundanga wondered.

He said Zambia would not achieve a more resilient economy if the current low levels of domestic savings were not improved.

“You need to get banks into the rural areas to get that money back into the banking system, that is part of the financial inclusiveness problem. If banks can go into rural areas, savings can be mobilised each time farmers get their income. But if this process is not done properly, we will not develop our economy because there won’t be enough money in the banking system,” he said.

Dr Fundanga said people in rural areas like Chilubi Island were desperate to have a banking institution.

“I will tell you for instance that I have received a letter from Chilubi Island. They are willing to even offer houses to a bank that will go to set up an office there. They are willing to offer an office which can be used as a banking hall,” said Dr Fundanga.