caleb m fundanga : catering for the un - banked population in zambia speech by dr caleb m fundanga, governor of the bank of zambia, at the official opening of stanbic bank limited ’ s mazabuka branch, mazabuka town, 10 october 2006. * * * • the incoming member of parliament for mazabuka, honourable gary nkombo, • the regional managing director of stanbic africa, mr. clive tasker • the town clerk, mr. chingangu • the district commissioner, mr. chinda • traditional leaders here present ; chief mwanachingwala, chief mwenda, chief hanjalika, chief nalwama, chief monze • the chairman of stanbic bank ( zambia ) and all board members present • the managing director of zambia sugar plc, and managing director of stanbic bank ( zambia ) ltd • stanbic bank management and staff present • distinguished invited guests, ladies and gentlemen it is an honour and privilege to be invited to officiate at this important occasion. today i join the bank ’ s board chairman in thanking the people of mazabuka for the effort and support that has been extended in establishing this stanbic branch, which i believe is the first in southern province. distinguished ladies and gentlemen, i have keenly followed the progress and growth of stanbic bank in the last few years and i must say that as governor of the central bank, it has been very gratifying to witness the progressive strategies of a privately owned commercial bank. i recall that not too long ago ( about 18 months or so ) stanbic bank took the very bold step of entering the community banking sector by adding matero branch to the bank ’ s network and thereby brought superior banking services to the bottom end of the market. this was later followed by the opening of the solwezi branch, in what is now regarded as the new copperbelt. ladies and gentlemen, what has particularly caught my attention is that stanbic bank expansion has gone in tandem with the introduction of atm services to these markets via the ‘ state - of - the - art ’ stanbic auto bank to improve service delivery to our people. this is commendable. mr. chairman, ladies and gentlemen, one of the major concerns that the financial sector development plan, and the bank of zambia in particular, have identified is the spectre of the unbanked public that hangs over the zambian economy. the problem with having a greater

importers ) of foreign exchange can trade transparently. following the introduction of this system, there has been a significant improvement in the supply of foreign exchange on the market owing to the confidence in the system by market participants, efficient flow of information among all players and improved external sector performance brought about by increased copper output and unprecedented high world copper prices in recent times. these developments have contributed to the relative stability of the kwacha against major currencies and thus moderating inflationary pressures. in addition, the containment of growth in money supply has contributed to this outcome. furthermore, the anti - dollarisation campaign that the bank of zambia waged some two and half years ago has had an equally important role to play in the observed relative stability of the kwacha against major currencies. however, continued relative stability of the exchange rate of the kwacha against major currencies is heavily dependent on longer term initiatives for sustained improvement in the supply of foreign exchange. among these strategies is a sustained increase in export earnings through the stimulation and maintenance of a strong export sector. ladies and gentlemen, let me now turn to the other part of the topic, namely, the process of foreign payments. the bank of zambia has issued directives that put limits on cash transactions in foreign exchange with authorised dealers. for instance, bureaux de change cannot transact in excess of us dollars 1, 000 or equivalent foreign currency per transaction per day with any one individual. this arises from their primary purpose of being money changers. the corresponding limit for commercial banks is us dollars 5, 000 or equivalent foreign currency per transaction per day for account holders and us dollars 1, 000 or equivalent foreign currency for non - account holders. it is important to stress that these limits for commercial banks pertain to cash transactions only. account holders and nonaccount holders alike wishing to transact above these limits can do so by choosing other modes of payments, such as, direct transfers, drafts, etc. any remittance in excess of us dollars 5, 000 has to be channelled through commercial banks and the person remitting the funds is required to support the transaction with appropriate documentation for statistical purposes, as well as guarding against money laundering and financing of terrorism. the convenience of making foreign payments from kwacha bank accounts has also been improved by introduction of new products. one such product is the visa based electronic debit card where holders of such cards can access their kwacha balances from anywhere in the