Bwalya K E Ng'andu: The National Strategy on Financial Education for
Zambia
Remarks by Dr Bwalya K E Ng'andu, Deputy Governor (Operations) of the Bank of Zambia,
at the launch of the National Strategy on Financial Education for Zambia, Lusaka, 12 July
2012.
* * *
The Deputy Minister of Finance, Honourable Miles Sampa, M.P;
The Minister of Education, Honourable Dr. John Phiri, M.P;
The Chief Executive Officer of the Securities & Exchange Commission, Dr. Wala
Chabala;
The Registrar, Pensions and Insurance Authority, Mr. Martin Libinga;
Your Excellencies, Heads and Representatives of Diplomatic Missions invited;
Senior Government and financial sector industry officials;
Distinguished Invited Guests;
Members of the Press;
Ladies and Gentlemen.
I am delighted to welcome you, on behalf of the three financial
Honourable Ministers,
sector regulators, i.e. the Securities and Exchange Commission, the Pensions and Insurance
Authority and the Bank of Zambia, to the launching of the National Strategy on Financial
Education for Zambia.
The launch is being done under the auspices of the Financial Sector Development Plan and
represents a culmination of a wide range of activities which have been carried out within the
scope of the Plan since 2002 with the objective of addressing challenges in the financial
sector and strengthening and broadening access to financial services in Zambia.
The origins of the Financial Sector Development Plan (FSDP), the vehicle through which the
strategy being launched today has been delivered can be traced back to the IMF and World
Bank sponsored Financial Sector Assessment Programme studies and the Bank of Zambia
Review which were conducted in 2002/3. Following these studies, the Bank of Zambia held
various consultations with other financial sector regulators and industrial players to gain buy
in and ownership of the proposals that had been recommended for implementation from
these institutions.
Subsequently, the Government approved the establishment in 2004 of the Financial Sector
Development Plan (FSDP) as the institution to deliver the required changes to the financial
sector in the country. During the first phase of the programme between 2004 and 2009, the
FSDP focused on updating financial laws and research and improving market knowledge of
the financial sector landscape. In phase two between 2010 and 2012 focus has been on
enhancing financial sector infrastructure which includes the establishment of a national
switch, carrying out a law review exercise to modernise and harmonise financial sector laws
and developing strategies for increasing competition among service providers so as to
favourably influence the cost and quality of service delivery of financial services, increase
access to financial services by developing a rural finance policy and strategy and lastly
delivering effective financial education.
Notwithstanding the work done through the FSDP, the financial sector in Zambia still faces a
number of major challenges. Access to financial services among the adult population is at
37.3%, the cost of accessing financial services is still high, the quality of financial service
delivery can do with some improvement and financial literacy remains low and presents an
important factor in explaining the low level of financial inclusion that we see in the country
today. The FSDP, Honourable Ministers, therefore, remains work in progress.
I would like, however, to mention some milestones which have been achieved under this
programme in order to underscore its potential as a tool for transforming for the better,
Zambia's financial sector landscape.
Under the FSDP, we have witnessed the establishment of the Credit Reference Bureau
which is beginning to play an increasingly important role in helping financial institutions better
manage credit risk, which in turn, should feed into less expensive credit. A draft rural finance
policy and strategy aimed at improving finance to rural areas has also been completed and
awaits implementation. Another important exercise accomplished has been the law review
exercise which has reviewed all existing legislation in the financial sector with the view to
modernise, harmonise them and ensure that the different legislations speak to each other
rather conflict each other. Consequently, we will be submitting to Government amendments
to various laws, including those in banking, insurance and the capital market.
Another significant accomplishment under the FSDP has been work done so far in
formulating a national strategy for financial education. This initiative grew out of the
recognition of the fact that financial institutions and certain NGOs that were engaged in
promoting various financial education activities and programme were operating in isolation.
What was clearly missing was a coherent and well-co-ordinated strategy among these
organisations for delivering an effective education to enhance financial literacy and inclusion.
Consequently the FSDP identified the need to develop a coordinated approach to financial
education as a meaningful way of bringing progress to this process. It therefore, started its
intervention by commissioning a stock taking study of financial education efforts taking place
in Zambia in order to establish its true status. DFID provided financial support in the form of
technical assistance which enabled the FSDP to recruit FinMark Trust to carry out the study.
Subsequently, a report was produced and presented to various stakeholders in November
last year. The recommendations from the stakeholders meeting were then sent to the FSDP
Steering Committee in April this year. This Committee endorsed the report and it is this
report which is being launched today as the National Strategy on Financial Education for
Zambia. Once launched, it will be implemented in earnest.
the activities that have been carried out under this programme have
Honourable Ministers,
been made possible by the very generous financial support extended throughout the different
phases of the programme by the IMF, World Bank, DFID, SIDA and the Government of the
Republic of Zambia. Of course the three regulators, BoZ, PIA, and SEC have also done their
bit by seconding personnel to the FSDP Secretariat and taking responsibility for the financial
obligations entailed. I want to thank all of them for their commitment and dedication.
It is now my singular honour and privilege to call upon the Deputy Minister of Finance,
Honourable Miles Sampa, MP to formally launch the National Strategy on Financial
Education for Zambia.
Thank you.