Rural financial inclusion in Zambia has continued to be an issue of concern with various stakeholders taking interest. Today, the Minister of Finance launched a Rural Financial Policy and Strategy (RFPS) as a way to improve rural financial inclusion.
The policy is expected to help improve access and usage of quality financial services in the country especially in rural areas.
Speaking during the launch of the policy in a speech read for him by Secretary to the Cabinet Fredson Yamba, said “the policy aims at having a well-developed and inclusive financial system that supports efficient resource mobilization and investment for sustainable economic development.”
Two weeks ago, government launched the National Financial Sector Development Policy and Strategy.
In Africa, Zambia has one of the lowest financial penetration rates especially in rural areas.
The minister observed that, according to the 2015 FinScope Survey, financial inclusion across Zambia has increased significantly from 37.3% in 2009 to 59.3% in 2015 of adults.
“However, the same report notes that in rural areas, financial inclusion stood at 50.1% whereas financial inclusion was 70.3% in urban areas,” Mr. Yamba noted.
He cited lack of consumer awareness and financial literacy on the demand side and inadequate regulatory framework among others as constraints to increased financial inclusion in the country.
Other constraints listed are;
a) Low human resource capacity and competency in structuring finance for complex agricultural operations.
b) A reliance on mortgages as collateral and
c) Inadequate experience and legal framework for use of collateral substitutes and little understanding on how to tailor financial services to suit product value chains on the supply side.
It is expected that the launch of the rural financial policy and strategy with support from Rural Finance Expansion Programme (RUFEP) will help address the constraints particularly for rural areas.
Meanwhile, International Fund for Agriculture Development (IFAD) country director commended government for the launch of the policy stating that it shows government’s efforts in ensuring that Zambia attains financial inclusion especially in rural areas.
In a speech read on her behalf by Dr. Dick Siame, Ms Abla Benhammouche said the RFPS and other key financial policy documents recently launched offer a clear road map for fincinal inclusion in Zambia.
She notes that, “IFAD in partnership with GRZ will ensure that it continues investing in rural people to reduce poverty, crate wealth and make sure that no one is left behind.”
The launch of the Rural Financial Policy and Strategy (RFPS) is expected to improve universal access and usage of quality financial services especially in rural areas.