Almost 40 percent of Zambia’s adult population are formally financially included, or over 3.5 million people. This is according to the FinScope Zambia 2015 survey, which says the levels of formal financial inclusion have gradually increased in Zambia – from 23 percent of Zambian adults in 2009, to 38 percent in 2015.

This is due to more financial access point coverage and concerted government efforts to create an environment conducive to greater inclusion. Women are still more financially excluded, though, with only 2 out of 5 having access to formal financial services.

“Women must not fear banks,” says Mary Banda, who runs a small restaurant in Kamwala market, one of Lusaka’s oldest markets. “It is very important to save money because the informal sector where we operate has no social security.”

“Financial services must bring their services closer by opening banking kiosks,” she added. “Many women in markets are discouraged from saving in banks, because it is time consuming and they cannot leave their businesses unattended for a long time.”

World Bank support

The World Bank is helping the Zambian government to advance financial inclusion through the Financial Inclusion Support Framework Country Support Program (FISF-CSP). “The Bank’s support will contribute to increasing the usage, access, and quality of financial services for individuals and enterprises,” said Ina Ruthenberg, World Bank Country Manager for Zambia.

This support from FISF-CSP involves: the development of the National Financial Inclusion Strategy and its early implementation; the development of financial infrastructure; the strengthening of financial consumer protection and financial capability; and the promotion of diversified financial services.

And now Zambia has joined more than 30 countries to launch strategies for financial inclusion.

On November 8, 2017, the Government of Zambia disseminated three documents – the National Financial Inclusion Strategy, the Financial Sector Development Policy, and Financial Capability Survey Report. The three documents will help strengthen the development of the financial sector in Zambia.

The strategy, policy and the survey report are a product of extensive stakeholder consultations with members of the public sector, private sector, civil society organizations, and academia led by the Government’s National Financial Inclusion Drafting Committee. The strategy will guide Zambia in its plan to achieve the universal access and use of a broad range of affordable financial products and services.

“Enhancing the financial sector will enable all Zambians to reap the full benefit of financial inclusion,” said Zambia’s Finance Minister, Felix Mutati. He said these improvements included helping individuals find the right savings, credit, payment, insurance, and investment services to plan and manage their risks, and helping firms access affordable financing to facilitate innovation, growth, and employment.

“The strategy will provide a detailed roadmap and concrete actions to build an inclusive and competitive financial sector in Zambia,” said Uzma Khalil, the Bank’s Country Senior Financial Sector Specialist. “Successful implementation of the strategy requires strong commitment and concerted efforts from all stakeholders – the government, private sector, civil society and the academia.”

Among the many challenges identified in Zambia’s financial sector, low financial capabilities and little willingness to use formal financial products and services are key to increase usage of formal financial services. In response to these challenges, the Government of Zambia requested the World Bank Group’s support in its efforts to increase financial inclusion. By launching the strategy, Zambia has joined more than 30 countries that have launch similar strategies.

“Financial inclusion is a priority for the World Bank for achieving universal financial access by 2020, and is vital to help overcome the challenge of eradicating extreme poverty and increasing shared prosperity,” said Paul Noumba Um, World Bank Country Director for Botswana, Lesotho, Namibia, South Africa, Swaziland, Zambia, and Zimbabwe.

The strategy’s implementation is expected to hit several targets by 2022, including: i) an increase in overall financial inclusion (formal as well as informal) from 59 percent now to 80 percent in 2022, and an increase in formal financial inclusion from 38 percent now to 70 percent then; ii) and improved physical access to high-quality financial services, including bank branches, agents, and ATMs, so that the number of financial access points will increase from approximately 7 to 10 per 10,000 adults.

The capability survey report launched alongside the strategy and policy reveals the relationship between financial capability and financial inclusion. One of the findings shows that Zambians with low financial literacy tend to be less financially included and to use more informal products than those with higher levels of financial literacy.

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pdf Zambia National Financial Inclusion Strategy 2017-2022 (3.45 MB)

pdf Zambia National Financial Sector Development Policy 2017 (1.71 MB)