bwalya k e ng ’ andu : improving access to finance by the smes in zambia remarks by dr bwalya k e ng ’ andu, deputy governor ( operations ) of the bank of zambia, at the signing ceremony for a credit line of us $ 5 million between norfund and bancabc zambia, lusaka, 1 december 2011. * * * your execellency, the norwegian ambassador, mr arve ofstad ; members of the diplomatic corps present ; the chairman of bancabc zambia limited, mr. chanda chileshe ; the managing director of bancabc, mr. dana botha ; head of the norfund southern african office, mr. deepak malik ; distingusihed invited guests ; members of the press ; ladies and gentlemen. let me begin by thanking bancabc for inviting me to be the guest of honour at this very important event, where we will witness the signing of a credit line worth us $ 5 million between bancabc and the norwegian investment fund for developing countries ( norfund ). it is pleasing to know that the credit line to be signed this morning is specifically tailored to provide financial support to small and medium scale enterprises ( smes ). the development of the sme sector and its potential to contribute to aggregate productivity growth, economic growth and development have been stifled by the generally limited access to finance. the credit line to be signed today is an important milestone in improving access to finance by the smes in the country. equally as important as access to finance is the price of financing that is placed at the disposal of smes. the general trend in the market has been to charge smes with high interest rates relative to the large scale corporate sector because of the perceived high risk they are supposed to present. distinguished invited guests, my view is that this presumed high risk profile associated with smes can be effectively managed by banks if they make the necessary effort to understand the sector and build expertise in dealing with its unique characteristics. i trust that you will double up your effort in building the expertise necessary for your bank to be a major lender to the sme sector. the issue of interest rates is of particular concern to us at the central bank. in response to the current situation, the bank of zambia recently took measures aimed at facilitating the reduction in commercial banks ’ lending rates with the view to increasing access to credit by private individuals and business entities. some progress has been made in

, the e - euro should be a digital banknote – in other words " cash + ". first, it should have the same properties as cash. in particular, it will guarantee respect for privacy, iii with offline functionality guaranteeing the utmost confidentiality. it will be the safest asset as it will have legal tender statusiv and it will be accepted everywhere throughout the euro area. its basic functionalities will be free for individualsv and it should not be remunerated. but " cash + " will also provide additional advantages over banknotes : it will allow everyone to use central bank money in e - commerce, for peer - to - peer payments as well as for conditional or " programmable " payments. these considerations have led the eurosystem – under the auspices of christine lagarde and my colleague fabio panetta - to launch an investigation phase focused on a digital euro, which should culminate in a preparatory phase by the end of 2023, subject to the agreement of the governing council. based on these preparations, we could then decide on a gradual launch, beginning in 2027 or 2028. last wednesday, the european commission published a draft directive to enable the issue of a digital euro. this legislative proposal is clearly a very good step in the right direction : it ensures that the digital euro will indeed be equivalent to a “ digital banknote ”, providing a high level of confidentiality, while guaranteeing that it is properly integrated into the financial and payments ecosystem. let us be clear here : i consider it our duty to develop this possibility for our citizens, however, they themselves will be free to use it or not. the digital euro will offer european citizens an additional option as to how they effect purchases page 5 of 6 and transactions ; they will determine both the pace of its development and its'market share '. a digital euro will replace neither physical cash nor other forms of currency – which brings me on to the so - called " competition " issue. we regularly hear an unfounded but very persistent rumour whereby the digital euro would compete with commercial bank money. let me be very categorical on this point : a digital euro will not lead to disintermediation. it would be distributed by payment service providers - we have absolutely no intention of opening private accounts - and be subject to a holding limit. our fellow citizens are in need of everyone ’ s expertise : both the agility and customer relationships of commercial banks and the confidence and stability guaranteed