caleb m fundanga : launch of info - zambia bank student loan scheme remarks by dr caleb m fundanga, governor of the bank of zambia, at the launch of the indo - zambia bank student loan scheme, mulungushi university, kabwe, 21 april 2009. * * * hon. minister of education, professor geoffrey lungwangwa, mp the chairman of mulungushi university council, mr costain chilala the vice chancellor of mulungushi university, professor vernon chinene the chairperson of indo - zambia bank limited, mrs o moyo the managing director of indo - zambia bank limited, mr s r shukla members of staff of mulungushi university and indo - zambia bank limited members of the press invited guests ladies and gentlemen i am grateful to the vice chancellor of mulungushi university, professor chinene, for extending an invitation to me to witness the launch of the student loan scheme by our minister of education hon. professor lungwangwa. chairperson, i am reliably informed that the student loan scheme being launched today is the latest among the many product initiatives that indo zambia bank limited will be launching in the near future. the student loan scheme represents a major shift from the traditional loan schemes that have for a long time characterised traditional banking models in zambia. chairperson, the bank of zambia supports the introduction of innovative products such as the student loan scheme, a service that will allow parents and guardians who bank with indo zambia bank limited to access loans to meet university fees for their children at concessionary rates. hon. minister, this loan scheme being launched today provides a real opportunity for human capital development, which is necessary for national development. it enables children who would otherwise be excluded from the educational system have decent opportunities to receive education, as their parents can now access loans specifically targeted at meeting their educational expenses. ladies and gentlemen, a nation ’ s development depends on the levels of skills among its people and it is our expectation that the launch of this scheme will contribute towards this noble cause. to this end, i would like to encourage parents and guardians to use the student loan scheme in order to realise the vision of educating their children. chairperson, what we are witnessing today represents an initiative by banks to respond to the needs of the community. as the central bank, we commend your bank for this initiative, which was borne out of the identified need to develop financial products that address problems in our society. chairperson, ladies and gentlemen, let me end

money lenders. i am happy to report that seven out of the nine proposals made have been progressed with the other two still under discussions. the government and world bank are already in negotiations for a financing arrangement that may incorporate a form of guarantee scheme and financial education elements while dbz has been recapitalized and has disbursed some funding through other financial institutions. a legal framework for consumer protection as well as possible incentives have already been taken account of through adequate provisions in the revised banking and financial services act which is under government consideration for possible legislation in 2014. guest of honour we all agree that one of the major barriers to growth of the sme sector in zambia is the shortage of financing despite its high potential to catalyze growth and employment creation. it therefore makes business sense that the financial sector should start to look at the financing problems for smes in a holistic manner which takes into consideration other developmental constraints which may impede sustainable growth and render the financing ineffective. in line with government ’ s desire to enhance local content through smes and use of locallymanufactured inputs in the zambian mining industry, a study in the mining sector is being under taken by the zambia local content initiative ( zmlci ) facilitated by the world bank and co - financed by dfid. the goal is to build sustainable collaboration between smes and the mining industry. it is our hope that the above initiative will be extended to non - mining related smes such as those in agribusiness, tourism and retail. honourable minister you may wish to note the following topics that will be discussed during this forum : i. sme financing and business linkages, ifc experiences in africa ; ii. sme financing and experiences and lessons learned – afdb ; iii. promoting business linkages in zambia – dfid zambia ; and iv. sme financing and business linkages in zambia – focus financial services. further, the programme will include panel discussions on policy recommendations and an interactive session. the discussion panel will, among others, cover policy issues and outline some possible recommendations for action. chairperson as i conclude, allow me to thank the presenters and panelists for accepting to facilitate our deliberations at this forum. i urge all delegates to engage fully in these discussions so that we can collectively develop pragmatic solutions to the financing challenges facing zambian businesses. thank you for listening. bis central bankers ’ speeches