As we embrace mobile banking, the primary objective of Zambia’s mobile banking framework should be to empower the millions of citizens who do not have access to conventional banking. The essential spirit of mobile banking should be financial inclusion. In this regard, facilitating mobile banking will contribute to the distribution of resources to productive activities such as farming as well as directing resources to areas where there are most needed. In addition the policy framework should be flexible enough to allow the industry players to explore various business models. To this end the National Payment Systems Act of 2007 has provided a platform for businesses involved in mobile banking and money transmission to be designated. The need for effective regulation to ensure a stable financial sector and protection of consumers is vital. Nevertheless, regulation should facilitate and not impede development and must create an optimal, dynamic and agile banking environment. As Regulators we must therefore be open minded to new market solutions while the developers need to constantly engage the regulator in their product development. In stressing the need for effective regulation, I must emphasise the need for providers to observe the mandate and requirements of their licences. Mobile services providers must not perform banking services as this is the domain of licensed banks. Finally, I also wish to stress that mobile service providers and mobile banking solutions developers need to have in place robust business continuity plans that will ensure minimum disruption to services in the event of disasters.

A number of banks and financial services providers have increased their branch networks, lending to small and medium-sized enterprises have been increased while financial products specifically designed to meet the financing needs of the lower end of the market in both rural and peri-urban areas have been introduced. One such product that banks and other institutions in the telecommunication sector have strived to promote in order to increase inclusion is mobile banking. As you are no doubt aware, Distinguished Ladies and Gentlemen, mobile banking represents a significantly cheaper alternative to conventional branch based banking as it allows financial institutions and other commercial players to offer financial services outside the traditional  BIS Review 111/2009  1  brick and mortar bank concept. Mobile banking uses channels such as retail agents and mobile phones to increase financial outreach to the un-banked communities. Mobile banking has revolutionalised banking worldwide and I am glad to note that Zambia is playing a leading role in the development of the mobile banking industry in the SADC region. As you may be aware, there are three operational mobile payments companies that have successfully penetrated the market in the past seven years. While a number of banks now offer mobile banking solutions. The British Broadcasting Corporation (BBC) website recently carried an article wherein, it was acknowledged that Africa has the fastest growing mobile banking market in the world. The significance of the article was not only the growth of the industry but the acknowledgement that most of the operators are local companies.