Transformational power of savings

MIRRIAM ZIMBA writes@SunZambianTHE Savings Awareness Week is finally here, as Zambia joins the rest of the international community in commemorating the 2020 World Savings Day.In Zambia, informal financial services include savings groups, village banks, kalobas and chilimbas. Although access to formal financial services has been increasing, informal financial services remain relevant as their value to […]

Transformational power of savings
MIRRIAM ZIMBA writes@SunZambianTHE Savings Awareness Week is finally here, as Zambia joins the rest of the international community in commemorating the 2020 World Savings Day.In Zambia, informal financial services include savings groups, village banks, kalobas and chilimbas. Although access to formal financial services has been increasing, informal financial services remain relevant as their value to the users is a mix of social and financial elements. An increasing number of Zambians now use both formal and informal financial products.The commemoration of the World Savings Day which falls on October 31, 2020 under the theme is ‘When You Save a Bit, Big Things Happen’, will be celebrated alongside the 2020 Financial Literacy Awards Ceremony, which recognises and appreciates various institutions and individuals alike for their various efforts in scaling-up financial literacy campaigns across the country.According to the World Savings Bank Institute (WSBI), savings, is a real virtue-a world virtue that aims at helping people navigate through various key life events. “Savings help protect one’s self against accidents, or for investing in education, for preparing for the future, building or purchasing a house, setting up a business, and finally, making a dream come true”.Savings builds character, generates self-confidence and moral strength necessary to undertake. Savings provide a sense of self-worth that pays dividends from childhood, through to adulthood. Savings provide a direct link with self-worth in the sense that through savings are a pathway to a cycle of good decisions, which ultimately extend to the approach taken by people when engaging with the financial sector.Based on this premise, people are encouraged to take up savings with a formal financial institution-and the reason for this is simple-security. Savings with a formal financial institution such as a commercial bank will allow you to build a financial track record or a financial history, that plays a critical role in easing the credit application process in order for one to obtain a loan or other credit facilities from institutions such as banks.Encouraging people to save is based on a customer driven policy and to offer the financial products and services that best fit their key life events. Financial literacy campaigns should comprise a financial education service component and direct support from the financial service providers to enable clients make informed choices on products and services that suit their needs.This approach applies to children, youth, and adults, who require simple and accessible savings products based on information on the benefits of these products and services. Because savings is a lifelong process, it should start at an early age and continue throughout one’s lifetime.Therefore, there is a strong need for deliberate measures to create financial awareness and knowledge for young people, especially those below the age of 30 years, who currently represent 70 percent of the African population, at the same time, represent nearly 40 percent of the global population.Studies by the WSBI indicate that young people are more active savers, and that the more they earn, the more they save. This research, which has savings-focussed projects with financial institutions in five African countries, indicates that if the income level varies with age, they have the potential to save as well as to repay a loan (loans that could help them start a business).Faced with this potential, both political decision-makers and financial service providers have a role to play, that is, to ensure that financial products offered evolve with the needs of the young people from school savings to professional investments.The research further indicates that much of the African population is not banked and has very limited financial means.Banks and other financial service providers contribute to the economic and social development of each person, each community, and the nation at large. This is achieved through financing credits, loans, and investments in local projects.Therefore, the importance for the banking sector, as well as other financial service providers to innovate and build customer-drive financial services cannot be over-emphasised. The sector has the tools, mindset, and drive to ease access for Zambians.The research also indicates that even the poorest populations, young people gain savings habits too. Public and private sector players-like banks, schools and policymakers are encouraged to embrace savings and support it in the long run.FRAUD PREVENTION TIPSCellphone Banking The mobility of your cellphone allows you to bank at any time from practically anywhere. It is a safe way of doing your banking as it relies on encrypted SMS messages or secure WAP connections. WAP uses similar security as that used by Internet Banking. It is therefore important to make sure that your cellphone is locked at all times and that the latest software is downloaded to ensure your safety. IMPORTANT NOTES:Memorise your PIN never write it down or share it with anyone.Make sure no one can see you entering your PIN.Choose an unusual PIN that is hard to guess and change it often.Remember, for your own security you are required to re-enter your PIN before each transaction.If you think your PIN has been compromised change it immediately if there is an option. If there is no option to change call customer care or visit your nearest branch so that you can change it immediately.Protect your phone content and personal information you saved by using a PIN or Password to access your phone. Do not leave your phone unlocked.If you receive a phone call requesting personal information do not respond and end the call.If you use a Smartphone, install an up-to-date anti-virus application to your cellphone. Most banks provide this free of charge to its customers.Please share your comments and thoughts with us via Email: Mirriam.Zimba@baz.co.zm The Sun