FinScope 2015 Top Line findings on Zambia’s financial inclusion, mobile money included

Panel of discussants from the banking sector

The launch of the FinScope 2015 Top Line Findings on financial inclusion in Zambia took place yesterday, thanks to the Financial Sector Deepening Zambia programme (FSDZ), and was focused on a report on the findings for 2015 compared to the 1^st financial inclusion findings that were reported in 2009.

The findings of 2009 revealed that only 37.3% of the Zambian adult population were financially included. There were also more banked men than women then. The reasons behind this were mainly the high cost of banking with institutions, and a lack of information on how some products work. As of 2015, the report now shows that 59.3% of the adult population is financially included, with more women having been included financially in the last 5 years. The age group that was targeted was between the ages of 26 to 35 years old for both years

There has also been a new parameter in the FinScope Top Line 2015 findings this time, that being mobile money usage. There are about 1.1 million adults using mobile money for either sending or receiving money, buying airtime or paying bills. A cause for concern is that very few of them are using these mobile wallets for saving their money.

The only way that mobile money can grow in Zambia is to provide awareness of the service and this has to be done effectively by the relevant mobile money provider which right now consist mainly the mobile operators (Airtel and MTN) and a few other independent companies like Zoona.

The report also showed that in 2015, compared to 2009:

• More financial inclusion happened in rural areas (42 to 70.3%) compared with urban areas (34.4 to 50.1%).
• More females were financially included (33.9 to 57.4%) compared with males (40.8 to 57.4%).
• Financial inclusion was show to have increased mostly with people who earn regular incomes.
• There was a growth in the financial sector from the non-bank services such as mobile money, as over 1.1 million users of the various mobile money services exist in Zambia. There are also other ways people are using non-bank methods such as savings groups or ‘chilimbas’ where money takes turns being circulated amongst a group of people per period of time like a week.

The FSDZ sees mobile banking and electronic payments as having the most potential to change the financial game in Zambia to reach smallholder farmers, poor households, and SMEs. They, however, realize that more infrastructure needs to be set up to facilitate this, and new policies need to be made to improve mobile money environment. That is why the FSDZ is working with the United Nations Capital Development Fund (UNCDF)’s Mobile Money for the Poor (MM4P) program to promote digital financial services in the country, with the following goals:

• Providing financial and technical support to service providers and financial service agents;
  
• Supporting market and client research to develop products and services that reach low-income and rural households;
  
• Bringing large scale users into the branchless and mobile financial services system;
  
• Assisting central banks to create enabling environment for branchless and mobile financial services;
  

The panelists of the report findings agree that traditional banking methods are not enough to cover the entire population and thus mobile money is a great alternative. It is a simple service to use and does not need complicated software or explanation. This panel included the Bank of Zambia governor, and other representatives of the Insurance and Pensions boards as well as the Financial Sector Deepening Zambia members.

There needs to be a push as well on Zambians to start saving more in whatever means possible, whether mobile money or in a bank, where they can earn interest on their savings. More Zambians also need to sign up for insurance to cover any emergencies should disasters/ accidents occur. They should also stop evading taxes because they will greatly benefit from it when it comes to being paid out pensions later in life.

You can get the FinScope top line findings for 2009 here. The 2015 is not yet available online but a soft copy can be obtained from the FSDZ here.