‘Provide products to counter illegal money schemes’

BUUMBA CHIMBULU writes @SunZambian PLAYERS in the financial space should design attractive products for the informal market which has been vulnerable to swindlers through pyramid schemes. This will aid in improving the economic welfare of the country and reduce the proliferation of money circulation schemes and unfair business practices that are usually undetected in informal settings. This is according to the Bank of Zambia (BoZ) Deputy Governor for Administration, Rekha Mhango. Ms Mhango observed that the new informal financial services providers that were not formally regulated such as savings group and village banking had assumed more prominence in both urban and rural areas. She, however, said while some of these groups played an important role in providing savings and affordable credit to the communities, some unscrupulous individuals had taken advantage to swindle people through pyramid schemes. Ms Mhango was speaking in Lusaka recently at the dissemination of the FinScope 2020 survey findings. “It is thus important for financial service providers to find effective means of reducing informality by developing innovative financial models to link the informal savers to the formal sector. “Equally, we challenge payment service providers and mobile money operators to design products aimed at attracting the informal market players by taking into account their needs and vulnerabilities,” she said. Ms Mhango expressed excitement that the FinScope 2020 survey widened its scope to include thematic areas on financial health and the impact of the Covid-19 pandemic. The survey, she said, was a rich source of information which all stakeholders should fully exploit as the country developed mechanisms to extend financial inclusion. FSD Zambia Chief Executive Officer, Betty Wilkinson, said the 2020 survey incorporated aspects of the Covid-19 impact and financial health.  Ms Wilkinson said the survey would provide information on effects and hints on the steps that could be taken for economic recovery, particularly for the poor. She stressed that full financial inclusion and financial health were fundamental to the future of the economy. The survey, she said, would provide a wide range of information to grow and broaden an unprecedented variation of financial services.  FinScope 2020 can measure the progress against the National Financial Inclusion Strategy and provide a baseline for the new National Financial Education Strategy. “The FinScope 2020 results will provide help to organizations like FSD Zambia as we work more actively on financial health and aspects of financial services that serve to create jobs, improve business health, enable families to enjoy essential services, and face a sustainable future. “The information to come from the FinScope 2020 will also help policymakers, regulators, financial service providers, and others to improve and enhance their services, move down market, digitise, and more effectively enable financial capabilities and financial health for all Zambian citizens,” she said.