By Business Reporter

DESPITE countrywide efforts to attract and expand clientele base using innovative and attractive packages, banks in Zambia seem to have a long way to go.

In rural areas like Mporokoso District of Northern Province, the culture of saving leaves much to be desired, which is also the case with many other people around the country, as observed by experts.

Operators in the financial services industry have not even realised the onerous responsibility that is required of them in terms of their operational flexibility, customer care and product development.

With about 98,842 people in the district, some rural community are still learning on how to live with the only bank in the area, the National Savings and Credit Bank (Natsave).

Farmers, traders and civil servants have to cover long distances to access banking services either in Kasama or Mporokoso by way of road, covering around 178 kilometers.

As a result of the hardships associated with accessing banking services, people still keep large sums of money outside the banking system, which is not benefiting them, neither the economy as well.

Some people, especially farmers in the rural areas, prefer to ‘save’ by keeping their earnings in homes as they cannot withstand the ordeal that one has to go through to deposit let alone make withdrawals.

Besides that banking halls have continued to be inundated with long queues when members of the public service and others, troop to access their monthly earnings.

A farmer envisages a situation where access to financial services would no longer be a hustle but instead promoted a culture of savings and facilitate a higher level of investment in the district and the country in general.

Charles Mukukula a 33-year old farmer wishes the banking sector could engage in a deliberate sensitisation programme to enlighten the people on the importance of banking and explain the different services being offered, in line with the guidelines stipulated by the Bank of Zambia (BoZ).

Mr Mukukula said this would help capture the unbanked population thereby making the clientele grow.

The BoZ stipulates that the process of financial inclusion should involve access to banking and credit markets as well as financial education.

Mr Mukukula came back to his village after a stint in the city in the construction industry, and became a farmer five years ago and now resides about 10 km from the nearest bank,

Mr Mukukula’s farming activities involves growing maize and beans, which earn him between K20, 000 and K30, 000, but these earnings don’t find their way to any bank but end up in the home.

He has no immediate plans of opening a bank account as he believes that his money was safer under his custody.

Lunte Member of Parliament Felix Mutati noted that the bulk of the money still remained ‘under the pillows’ in most homes because of perceived complications in opening bank accounts.

Mr Mutati pointed out that a significant number of people in his constituency still held a large number of money outside the banking system, a development he described as saddening especially at the time Zambia was celebrating 50 years of Independence.

"It is important for the banks to make their products simple and straight forward in local languages. We need simple buildings in the villages where people can feel at home because all these shiny aluminium structures scare them away. As a consequence the bulk of the money remains under the pillows in the thatched huts," Mr Mutati explained.

He said the banking sector should assist poor constituencies by introducing mobile banking facilities, adding that having Natsave as the only bank in Mporokoso was not sufficient to carter for the whole
population in the district.

Mr Mutati is of the view that Natsave should introduce mobile banking in different localities including in Lunte.

This would help mobilise savings and provide for banking solutions needed for the rural community.

"One of the things the banking sector can assist the poor constituencies especially during harvest time is to introduce an extension of mobile banking facilities to the areas where banking
facilities are not accessible. Farmers have huge amounts of liquidity arising from disposable income from the sale of farm produce to various traders but we don't have corresponding banking facilities to deal with that,” Mr Mutati said.

He pointed out that people should be provided with the banking alternatives for them to be able to store their cash for future use.

"The banking system should not only locate themselves in Mporokoso they must at least have some mobile banking facilities. Apart from that banks should be able to take 50 to 60 per cent of the risk in
order to bring about financial inclusion," Mr Mutati said.

On the other hand, Natsave encouraged productivity solutions for the rural economy, not limited to agricultural activities but also explore possible non-agricultural activities, various support
services for rural production, small and medium size industry that could be established in rural areas.

So far, Natsave disbursed a total K15, 416 million out of which K200, 000 was given out to the Small and Medium Entrepreneurs (SMES) in Northern Province.

In spite of the inadequacy of the banking sector, an entrepreneur in the district Dramson Chipande commended the bank for providing credit to the local businesses.

"I started my business some time back and I deal in cement and hardware. I used to buy 600 bags of cement and now I am able to buy two trucks of cement from Lafarge Zambia from the loan I accessed worth K45, 000," Mr Chipande said.

Chief Mumporokoso acknowledged that his subjects especially farmers and businessmen were keeping money in the homes, which he described as a major problem.

"Our experience is that some farmers and businessmen do not put their money in the banks. They just keep their money in their houses. It is better to sensitize them on the importance of saving money in the bank," he said.

Commenting on the viability of the district, marketing development officer Chanshi Chishimba noted that it was important that the bank provided affordable loans to the farmers to help support their operations and growth.

Farmers in the district have more than K3.8 million worth of agricultural products to the Food Reserve Agency (FRA) and various traders.

About K2.7 million worth of maize was sold to the FRA from which K100, 000 was from vegetables and K1 million from beans.

ZAMBIA WANTS MORE INVESTORS

THE Government should cut down current administrative expenditure to promote investment agriculture growth, the Civil Society for Poverty Reduction (CSPR) has said.

Board chairperson John Lijimu said Government should cut down its current administrative expenditure to allow for greater investments in the social sectors and promote agriculture as a growth sector.

“This will require taking measures to cut down on the current size of cabinet to free-up resources that can be channelled to the promotion and further investments in the agriculture sector,” Mr Lijimu.

Speaking at the launch of “Walk the Talk Campaign in Lusaka: End Extreme Poverty Now”, he said greater investments in the sector would only be achieved by correct targeting of the farmers that were vulnerable but viable farmers. 

Mr Lijimu further said Government should also maximise revenue collection from the mining sector and reinvest in the agriculture sector and increase the number of beneficiaries under the Farmer Input Support Programme (CSPR).

Increasing allocations in a transparent manner to the agriculture sector will result in strengthening the rural economy.

CSPR feels the ministry of agriculture conduct consultative meeting s with small scale farmers to ensure investment in the agriculture through FISP were correctly targeted for immediate impact on hunger and income deprivation amongst the poorest rural households.

He also said there was need for the Government to handover the operations of the Food Reserve Agency (FRA) to private entities to ensure efficiency in the disbursement and payment of farmers on time.

“Doing so will promote private sector participation in the agriculture sector through promoting competitiveness to ensure job creation in the agricultural industry is boosted further,” he said.

The campaign will be carried out particularly in the Provinces with high extreme poverty levels but will seek to benefit every Zambian citizen.