InvestChat Radio Programme - Poised To Narrow The Financial Services Information Gap
Dear Reader,
Following a series of stories on smart saving and investing, this week we tell a somewhat different story. We look at Financial Inclusion (FI) particularly the barriers of it and how we are contributing to mitigating some of these challenges. We detail how we have gladly taken up the challenge to build a conducive environment for the development and growth of an inclusive financial sector that supports all aspects of the Zambian economy.
FI is about the usage of any financial services, formal or informal. Those who use financial services are referred to as ‘financially served’ or ‘financially included’ and those who don’t are referred to as ‘financially excluded’. Within the financially included category, people can be “formally included” (using financial services offered by formal financial institutions) or “informally included”(using informal financial services). Formal financial services are defined as any financial services supplied by institutions governed by a legal precedent of any type, and informal services are the opposite.
Financial Inclusion (FI) Goal – Our Passion
The goal of FI in Zambia is to improve the quality of life for people by reducing their financial vulnerability and increasing their potential for active participation in economic activities. Increased FI improves the economic wellbeing of a nation and is therefore at the core of our Financial Development in Zambia. As a Financial Institution, it is our duty to ensure that we create an enabling environment for people to soar in this aspect.
Zambia’s FI Commitment
The Government of the Republic of Zambia’s Financial Sector Development Plan (FSDP) Project was started following recognition of the key role that the financial sector plays in the development of our country and poverty reduction activities. The Bank of Zambia (BOZ), took the lead in this initiative and were/are supported by other financial services regulators, notably the Securities and Exchange Commission (SEC) and the Pensions and Insurance Authority (PIA). The aim of the FSDP project has been to guide efforts whose ultimate goal is to help our country realise the vision of a financial system that is sound and stable as well as market-based for purposes of creating economic diversification and sustainable growth. Zambia’s FI Score
So how are we faring as a country in FI? The Financial Sector Deepening Zambia (FSDZ) have taken the lead in conducting researches to assess how our journey regarding FI has progressed over the years, a big thanks to them. Researches were successfully conducted first in 2006 and last in 2015 to ascertain levels of FI – establishing the adult population who use financial services to manage their financial lives. The FinScope Surveys provide information about the usage of, demand for, and behaviour towards financial services amongst adults in Zambia. The Surveys have proved to be a major source of information for policymakers, financial service providers, researchers and others connected to the financial sector, in shaping financial policies and development. You will be glad to know that according to the FinScope 2015 findings there has been a significant increase in FI since 2009 resulting in the national target for 2018 of 50 percent FI having been exceeded. In 2009, 37.3 percent (2.4 million) of adults were financially included whilst 62.7 percent (4 million) of adults were financially excluded. In 2015, 59.3 percent (4.8 million) adults were financially included and exclusion had dropped from 62.7 percent in 2009 to 40.7 percent (3.3 million) of adults in 2015
Barriers To Financial Services Uptake
Despite the positive outlook of the FinScope surveys conducted so far, we have a lot of work to do as a nation. The uptake of Financial services could be a lot more than it currently is. In analysing the uptake of informal and formal financial services, it was discovered that the main factors prohibiting high levels of uptake were/ are either income related or lack of awareness and/ or understanding of services and benefits provided by various institutions. These can be solved through financial education programmes using platforms that are easily accessible by people in rural and urban Zambia.
Accepting The Challenge – Enhancing Awareness Through The IBP InvestChat Radio Programme
In the Finscope Survey Report of 2015, BOZ Governor’s message, Dr Kalyalya commended all stakeholders involved in making the Finscope Surveys a success as they form a great foundation of key knowledge regarding the nation’s progress in FI activities. These include FinMark Trust Zambia and FSDZ as well as their local partners, notably the Central Statistical Office and representatives from the respective FSDP working groups. He also extended his gratitude to the other financial sector regulators namely, the Pensions and Insurance Authority (PIA) and the Securities and Exchange Commission (SEC) for their invaluable input and support to this process. He ended by saying, ‘’By making this data available, it is hoped that policymakers, regulators and other institutional players will be encouraged to strive to build a conducive environment for the development and growth of an inclusive financial sector that supports all aspects of the Zambian economy.’’ At Investrust Bank Plc (IBP) we have gladly taken up this challenge! We tirelessly work at creating an enabling environment for people to be active players in the growth of our economy not only through the provision of innovative and quality but affordable products and services that we offer but also through creating awareness about the availability and features of our services. It is for this reason that we have continued our outreach efforts to our customers and the general public through various platforms which include radio.
Catch Us On…
Come next week, please remember to tune in to radios Hot FM, 1&2, Christian Voice and Phoenix at times and dates to be unveiled then as we interact with you through our Radio Programme dubbed the IBP InvestChat Radio Programme! During the InvestChat programme, we will share and discuss initiatives regarding our products and services that we cover aimed at increasing FI such as EazeSave accounts, prepaid cards, Agency banking and platform integrations with mobile networks and ZOONA among others.
We thank you for your continued feedback regarding the stories we share on InvesTalk. It helps us to grow and to serve you better. Until next week, stay blessed and be a blessing to others.