GET CHEAPER FUNDING FROM CAPITAL MARKET, ZAMBIANS URGED

By BUUMBA CHIMBULU GOVERNMENT has prodded citizens to utilise the stock markets for cheaper capital funding, as it develops a bill which will allow the use of electronic signature during online transactions. The Ministry of Finance is therefore working with the Lusaka Securities Exchange to introduce Retail Bonds on the capital markets. This will enable citizens to buy a retail bond with as low as K500 once an initiative called Retail Bond which is currently being developed is introduced. Retail Bonds are bonds specifically issued for retail investors. Stock markets are a cheaper way to raise capital as they do not attract any interest, says Ministry of Finance Permanent Secretary for Economic Management and Finance, Mukuli Chikuba. Mr Chikuba explained that capital markets offered a number of benefits such as raising cheaper funds and encouraged savings. The Permanent Secretary however expressed concern that the capital markets had been underutilised and therefore called for more sensitisation. He said this when making a presentation at the ongoing media training organised by the Financial Sector Deepening Zambia (FSD Zambia). “The treasury bills, the bonds have quite good returns and you do not need a lot of money for you to invest in bonds or treasury bills but we need to do a lot of work so that citizens can know that even with little money, you can invest in. “But also the use of stock markets, we have not seen a lot of use of the stock exchange in that regards for raising capital which for me is the cheapest because what you do is you don’t have to pay interest you just offer shareholding and you can still maintain majority shareholding,” Mr Chkuba said. Meanwhile, Mr Chikuba said there was currently in Parliament the Electronic transaction and communications bill which will enable citizens to transaction using an electronic signature. Mr Chikuba explained that the bill was currently at committee stage in Parliament where submissions were being received from stakeholders (witnesses). “You can now transact using the electronic signature but most importantly Government is also setting up a fully-fledged department that will be looking at the issue of rolling out the electronic transaction   in the country. “It is expected that before Parliament rises, it will be passed ready for ascending,” Mr Chkuba said.