It is only through such collaboration and consultation involving key stakeholders that we are able to improve our local situations as we seek to have a stable macroeconomic environment and an inclusive financial system. These are preconditions for achieving economic development and accordingly, one of the principal tenets of economic development is access to financial services. in this regard, a national payment systems development has a fundamental role to play to enhance access. Chairperson, I have noted that the theme for this year’s conference, “Setting New Standards for Cellphone Banking” is very fitting for Zambia as we face the challenge of ensuring that the majority of our adult population has access to formal financial services. As you may be aware, a large component of the work being undertaken under the Financial Sector Development Plan (FSDP) and the National Payment Systems Vision and Strategy 2007–2011 is focused on improving financial access and contributing to the establishment of inclusive financial markets in general. The recent Finscope Survey revealed that only 37.3% of the adult population have access to formal financial services leaving 62.7% of adult population financially excluded. Although significant strides have been made to improve financial access and introduce more convenient services, more work needs to be done. Ladies and Gentlemen, this state of affairs hinders people’s ability to establish financial transactions. Effectively, lack of financial access stifles entrepreneurship and holds back the country’s economic growth. For instance, as at June 2010, there were only 258 bank branches and agencies in the whole country.
Ladies and Gentlemen, although Mobile Money Transfer provides a solid platform upon which to anchor expansion in the coverage of financial services, this goal will not be realised unless all stakeholders participate and play their respective roles effectively. Accordingly, banks and other payment system businesses need to utilise this infrastructure to the fullest extent possible by ensuring that various products are developed to extend financial services coverage. At the same time, households and businesses need to change their attitude towards non-cash payment methods. It therefore goes without saying that financial education will be critical in shifting public attitudes and ensuring that the non-cash payment methods are widely utilised by the target market. In this regard, I am pleased to inform you that the FSDP has prioritised financial education so as to increase the level of financial literacy and awareness of alternative payment methods. I would like to urge all financial service providers to not only take advantage of this initiative but also to design their own programmes to sensitise their customers of the innovative products they offer or plan to offer which promote financial inclusion. Furthermore, as Bank of Zambia we welcome the innovations by the banking sector and other financial service providers aimed at enhancing financial inclusion. However, it is our responsibility to ensure that these services are provided in a safe and efficient manner. In this regard, the Bank of Zambia reviews these banking products before their introduction to ensure that they comply with the existing prudential and statutory financial sector requirements.