Zambian central bank calls for more community banks

Zambian central bank has called for establishment of more community banks and branches throughout the country to enhance cheap banking services, Sunday Times of Zambia reported.

It quoted Governor of Bank of Zambia Caleb Fundanga as saying in Lusaka that the central bank attaches great importance to the establishment of the community banks and branches as they are among the key requirements for the promotion of affordable banking services to the community.

Launching the community bank branch of Cavmont Capital bank in Garden township of Lusaka, he said the community banking leads to the lending, investment and provision of services primarily to low and moderate income individuals.

"The problem with having a large population being left out of the banking system is that it discourages the culture of saving and removes the un-banked population from the formal structure of the financial system which ultimately leads to reduced funds being available in the economy for investment purposes," he said.

Fundanga said the launch of the community bank in the township has come at a right time when the city is experiencing a shift of some business activities that will have an opportunity to use the facility.

He urged the bank to ensure that it offers low operation cost to the community to encourage greater economic activities.

Zambian economy is currently undergoing positive changes with the annual inflation rate at single digit since April this year while the lending rate has been reduced, the governor said.

On the same occasion Cavmont Capital bank board chairman Wila Mung'omba said his bank believes that banking must be affordable and accessible to the people to enhance economic development.

The launch of the branch in Garden township by Cavmont Capital bank brings to 11 in eight towns the total number of its community bank branches in the country.

Source: Xinhua