, the rapid growth of the chinese economy has entailed greater demand for primary commodities like copper. coupled with this, the demand for manufactured goods from china has increased in a number of countries including zambia. the level of chinese investment pouring into the country has also significantly increased while the chinese community in the country has continued to grow following the rising number of chinese investments in zambia. the level of interactions between zambian businesses and those from china has therefore significantly increased. however, the obvious and notable obstacle to the smooth conduct of business transactions and interactions between the people of our two countries has been the language barrier. many a time, communication between our people has been through the use of interpreters. reliance on interpreters can be very inconveniencing, ineffective and costly. this barrier can be overcome by learning the chinese language. it is against this background that the bank has taken keen interest in launching this mou. the principal objectives of the mou are to : a ) establish a framework in which the chinese international school can facilitate capacity building in learning the chinese language among boz employees ; b ) promote multi - cultural awareness and appreciation of a diversity of languages necessary for bank staff to transact effectively and efficiently in social and professional fora which require the usage of chinese ; and c ) enhance opportunities for bi - and or multilateral co - operation between the bank and relevant chinese - speaking authorities and stakeholders. it is therefore our hope that the mou we are signing today will assist in not only fostering stronger trade relationships between zambia and china but to also avail our staff a multi cultural awareness which would assist them both in their official work and in developing their social networks. we also hope that staff will have opportunities for higher education in china and other south east asian countries where the chinese language is spoken. allow me to mention here that, already three bank employees are currently pursuing phd programmes in china under the chinese government scholarship programme. with the introduction of this initiative, it is my hope that more of our staff can be offered scholarships to study in china. in conclusion, let me appeal to the members of staff who will be enrolled on the programme to take the course seriously bearing in mind the resources that the bank is investing into this undertaking. to this effect i urge the human resources department to enrol employees who are committed to learning the language. i also wish to thank the chinese international school in zambia for accepting our proposal and we look forward to a further cooperation with other chinese institutions in order to

of zambia views this development positively, particularly as recent trends indicate that many institutions in the financial sector are extending their branch networks. 5. however, it is important for financial service providers to complement branch expansion with increased product innovation. the ability to offer a broad range of products and services is the hallmark of financial sector deepening, as different types of products appeal to a wider range of clients, leading to enhanced access to financial services. the bank of zambia, as a regulator, is determined to facilitate viable branch expansion, and the introduction of new and innovative financial products, to tap savings and channel these savings to investment. the boz will therefore continue to work in close collaboration with the financial sector to cultivate partnership in order to establish the framework necessary for build ing strong institutions that will mitigate risks and build confidence in the sector. 6. as at 30th april 2009, natsave held customer deposits in excess of k135 billion with a loan portfolio of k92 billion and served over 120, 000 clients. natsave has also endeavoured to introduce various products such as marketeer and pensioner accounts ( specific savings products for people in these categories ), as well as loan products such as individual loans, salary loans and money transfer services. the development in lukulu therefore offers some hope that rural areas, and especially the agricultural sector, may eventually be offered attractive financial products. 7. notwithstanding this, allow me now to reflect on some of the key challenges in the financial sector that all of us must strive to address : ( i ) increasing access to financial services by the small and micro entrepreneurs who form the backbone of the economy. this sector provides employment for many people who cannot be absorbed into formal employment ; increased access to financial services remains a key challenge to this segment. ( ii ) the boz took a step towards regulating microfinance institutions ( mfis ) in 2006 because these institutions can help in narrowing the access gap in the delivery of financial services. so far, 21 mfis have been licensed but most of these operate along the line of rail providing mainly salary - backed loans. more institutions are still needed to increase outreach and deliver financial services in a safe, sound and sustainable manner ; ( iii ) zambia is predominantly an agricultural country, but lending to agriculture has been limited. the challenge therefore is to devise financial products that meet the requirements of the rural and predominantly agricultural areas while at the same time devising means of protecting the financial institutions from risks associated with