In most cases, these branches or outlets are located in urban centres, with rural areas having few if any branches. Conversely as at June 2010 the three mobile phone operating networks in Zambia had a total of about 4.6 million subscribers. Distinguished participants, this situation grants us an opportunity to develop innovative approaches of extending financial services. It will no doubt involve remodelling of traditional  BIS Review 144/2010  1  products, service delivery channels and regulatory frameworks. It is important that all possible alternatives are critically examined for viability, safety and efficiency. Some of the alternatives that need urgent examination include bank partnerships with non-bank agents to provide wider distribution outlets for payments and other financial services, and leveraging new technologies such as a common national switch to extend financial services. Mr Chairman, the Mobile Money Transfer has the potential to act as the fulcrum of branchless banking, which allows provision of transactional banking services without the need of a “brick-and-mortar” branch. Individuals are allowed to remotely access cash using different technologies, which may include automated teller machines, point of sale devices, mobile phones, payment cards or other smart technologies. To ensure that payment service providers take full advantage of the benefits that come with implementation of a Mobile Money Transfer, they must develop and embrace new business models. These models may be built around the existing large financial flows such as remittances, salary and wage benefits, pensions and other government social benefits transfer system.

It is only through such collaboration and consultation involving key stakeholders that we are able to improve our local situations as we seek to have a stable macroeconomic environment and an inclusive financial system. These are preconditions for achieving economic development and accordingly, one of the principal tenets of economic development is access to financial services. in this regard, a national payment systems development has a fundamental role to play to enhance access. Chairperson, I have noted that the theme for this year’s conference, “Setting New Standards for Cellphone Banking” is very fitting for Zambia as we face the challenge of ensuring that the majority of our adult population has access to formal financial services. As you may be aware, a large component of the work being undertaken under the Financial Sector Development Plan (FSDP) and the National Payment Systems Vision and Strategy 2007–2011 is focused on improving financial access and contributing to the establishment of inclusive financial markets in general. The recent Finscope Survey revealed that only 37.3% of the adult population have access to formal financial services leaving 62.7% of adult population financially excluded. Although significant strides have been made to improve financial access and introduce more convenient services, more work needs to be done. Ladies and Gentlemen, this state of affairs hinders people’s ability to establish financial transactions. Effectively, lack of financial access stifles entrepreneurship and holds back the country’s economic growth. For instance, as at June 2010, there were only 258 bank branches and agencies in the whole country.