Stanbic tips Village Banking groups

BUUMBA CHIMBULU writes VILLAGE banking groups should form partnerships with formal financial institutions to help hedge against economic shocks that may reduce the groups’ viability, says Stanbic Bank Head of Personal Business Banking, Mwansa Mutati. Ms Mutati observed that village banking was an important part of the local financial sector that was making significant contributions to the rate of financial inclusion in Zambia – especially among women. “Village banking has grown so much in this market that it has established itself as a significant pre-position in Zambia’s financial inclusion drive as outlined in the National Financial Inclusion Strategy 2017-2022 (NFIS 2022). “As a bank that seeks to see the country’s growth and prosperity trickled down to the individual, we made financial inclusion part of Stanbic Bank Zambia’s growth strategy,” she said in a statement. Ms Mutati said because Stanbic Bank had realise the role village banking played in the nation’s financial inclusion strategy, it had been supporting various village banking groups through its Chilimba Banking preposition. She explained that the Chilimba account was tailor-made to support village banking from a savings, bookkeeping and sustainability perspective. “Being the largest bank in Zambia, we are better able to absorb negative impacts from economic cycles – and this stability is extended to our clients and partners,” Ms Mutati said. Information Communications Technology expert, Susan Mulikita, said village banking groups were not as archaic as most people believed. Ms Mulikita said these groups were ran by sophisticated members of society and play a significant role in maintaining positive cashflow in several local businesses in the face of external shocks. She explained that village banking groups provided easy access to financial services and easier access to loans compared to formal financial institutions. “However, there is more to be done to make village banking more attractive to modern entrepreneurs, particularly women.  “By partnering with established financial institutions, the groups can utilise their services and assets to serve as a buffer against economic disruptions like the kind caused by Covid-19,” Ms Mulikita said. The Sun