Caleb M Fundanga: Exploring and creating financial opportunities in Zambia Remarks by Mr Caleb M Fundanga, Governor of the Bank of Zambia, at the official opening of Venture Capital Workshop, Lusaka, 26 January 2010. *  *  *  The Managing Director, Slyvettan Investment Limited, Mr Robert Masiye Distinguished Resource Persons, Dr Peter Njang and Mr Kenny Rice Distinguished Participants Members of the Press Ladies and Gentlemen I am greatly honoured to officiate at this important workshop which is aimed at exploring and creating financial opportunities in Zambia. I wish to extend a warm welcome to all participants and resource persons, particularly those who have travelled from outside the country. Mr Chairman, I would like to commend Slyvettan Investment Limited for organising this important workshop. This workshop which is aimed at increasing access to capital by local entrepreneurs through venture capital is indeed more than timely as the country strives towards financial deepening, wealth creation and reducing the levels of unemployment. In order to achieve this, affordable financial services should be available to the majority of businesses. It is also gratifying to note that, potential investors will present their projects for possible funding at this workshop. Let me begin by giving a brief perspective of the enormous investment potential this country possesses. Zambia is a country with abundant natural resources and human capital. It is a centrally located country with eight neighboring countries and close proximity to the large market of South Africa. It also boasts of a suitable climate and peace.

The focus of this Symposium – on insights, inclusion and innovation – underpins this adaptability. Insights – identifying with microentreprenurs As effective policymakers and practitioners, we need to have deep insights of our clients on-theground: the microentrepreneurs. This obligation begins with the awareness that the needs, tradeoffs and circumstances of microentrepreneurs are unique. They face very different financial constraints and in turn, very different choice sets. Hence, effective microfinance design that appeals to microentrepreneurs’ needs will not only require a rooted understanding of whether they have been good paymasters, who their other financiers are and how they conduct business; 1/3  BIS central bankers' speeches  but also their specific background, problems and values. As we speak, predictive credit analytics are being developed using alternative data, such as psychometric assessments and other non-financial information. This may be particularly useful in the microsegment, where traditional data on creditworthiness are usually scarce. These insights can also be leveraged to design products that are tailored towards the distinct needs of microentrepreneurs. Improving user experience and confidence is equally important. Application procedures, user interfaces and operational processes should be simple and seamless. Most importantly, they should be appropriate to the circumstances of microborrowers for whom a loan may well be the first experience with a formal financial institution. How they perceive this experience can have longer term effects on the level of trust they place in financial institutions, and reinforce behaviours that will either encourage them to use financial services, or further distance them from the formal financial system.