Distinguished Ladies and Gentlemen, the contribution of financial services to individual entrepreneurs as well as small and medium sized businesses cannot be over-emphasised. As you are no doubt aware, following the liberalization of the financial sector in the early 1990’s, the financial sector in Zambia has evolved rapidly spurred by increasing competition. Similarly, policies and the legal and regulatory frameworks have been developed to take into account the fast changing liberalised environment. These developments have resulted in a considerable increase in the number of banks and other financial service providers. Therefore, the banking sector has over the last few years, witnessed significant growth in consumer lending. As a matter of fact, on a sectoral basis the “personal loan” category has been the largest recipient of total credit in the recent years and accounted for 22% in November 2009. Small and Medium Enterprises have also significantly benefited from credit expansion. The resultant credit expansion has no doubt brought significant benefits to the economy as resources are increasingly channeled through to the lower end of the market. However, most of the credit extended by banks and microfinance institutions is targeted at individuals in formal employment or already established enterprises. Only an insignificant amount is extended to start-up initiatives or the informal sector. This has been exacerbated by the inability of entrepreneurs to articulate and sell bankable projects through robust business plans.
BIS Review 5/2010  1  In addition, it is common knowledge that Zambians prefer to be in formal employment rather than engage in entrepreneurial activities on a full time basis. The small number of educated Zambians engaging in entrepreneurial activities limits the scale of indigenous businesses as evidenced by the non participation of Zambians in major sectors of the economy like mining or manufacturing. It is however, important to realise that individual entrepreneurs as well as small and medium sized enterprises form the engine of economic and social development as they generate the much needed employment for our people. Hence the need to encourage all efforts aimed at stimulating entrepreneurship. Distinguished Invited Guests, our institutions of higher learning play an important role by molding and developing innovative and creative mindsets amongst our young people. With this belief in themselves, young people can be productive, take responsibility in their respective communities and ultimately drive our economy forward. We need to remind ourselves that Google was founded by students; Facebook was founded by a student; and even Microsoft was formed by Bill Gates as a student. Ladies and Gentlemen, let me assure you that the Bank of Zambia is committed to ensuring the availability of finance to viable entrepreneurs including small and medium sized businesses.