Denny H Kalyalya: Zambian financial sector - responding to the needs of
business
Speech by Dr Kenny H Kalyalya, Deputy Governor-Operations of the Bank of Zambia; at the
opening of Standard Chartered Bank Zambia Solwezi Branch, Solwezi, 10 December 2008.
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The Minister of Commerce, Trade and Industry, Hon. Felix Mutati
The Minister, North-Western Province, Hon. Joseph Mulyata
The Chairman of the Board of Standard Chartered Bank Zambia, Mr. George Sokota
His Worship the mayor of Solwezi
The Managing Director of Standard Chartered Bank, Mrs. Mizinga Melu
Distinguished guests
Members of the press
Ladies and Gentlemen
I am pleased to be here at the official opening of the new Solwezi Branch of Standard
Chartered Bank Zambia Limited.
Ladies and Gentlemen, recent times have shown a proliferation of commercial bank
branches in areas which had previously been considered unattractive for business. Rural
areas had even experienced closures where banks felt that they were unable to establish a
case for business. The economic environment that the Government created through the
reforms instituted in the early 1990's has given new confidence to investors and has provided
an opportunity for businesses to grow, thereby attracting banks to the areas which were
deprived of basic financial services. The opening of this branch today, in a town which has
attracted major investments, is a demonstration that the financial sector is indeed, now
responding to the needs of business.
The world's financial markets have been plunged into turmoil which some say is
unprecedented, or at least comparable to the levels experienced in the most severe financial
crises of the last century. Notwithstanding this, our financial system has demonstrated a level
of stability which to an extent has been derived from the strong capital positions that have
characterised the Zambian banking industry in the past few years. However, this turbulence
has already resulted in a reduction in projected global economic growth and a decline in
demand for Africa's exports. Notwithstanding this, we remain confident that the banking
sector will continue to show resilience and expansion through branch networks, thereby
acting as a channel through which services will be extended to the financially excluded.
Ladies and Gentlemen, a recent survey established that fewer than 15% of the Zambian
adult population have access to the services provided by commercial banks. The key
reasons for this low level of access were cited as the distance that needs to be overcome in
order to access the services and the cost of these services. It is therefore a welcome
development that commercial banks have responded to these challenges by reaching out
through new branches. However, banks need to be mindful of the fact that the many of our
people who need these services most of all are not able to bear the heavy charges that are
sometimes levied, and the goal of inclusion will stand to be compromised if this matter is not
addressed. The Bank of Zambia is in the process of engaging the banks with a view to
finding a solution to the high cost of banking which is often cited as the main hindrance to
access to finance. I therefore appeal to all the banks operating in Zambia to critically assess
the level of their charges and to continue playing the supportive role to development that they
have in the past.
In this regard, I am particularly pleased to make mention of the spirited efforts that Standard
Chartered Bank continues to make in financing SME's and Micro-finance. The experiences of
many economies show that these sub sectors have the capacity to create a middle class and
to emancipate both rural and urban dwellers from their poverty trap. Zambia has many
promising entrepreneurs whose only constraint is affordable funding. As you explore the
opportunities that this new venture will bring you, I urge you to focus on the customers who
may appear small today, but could grow with the bank if they are given the right support.
I wish you every success as you embark on this journey into North Western Province.