Find Banking and Financial Services expertise in Zambia
The banking sector has grown rapidly in recent years, following reform of the financial services sector in the 1990s. Of the 18 commercial banks the largest in terms of number of branches are Zambia National Commercial Bank with 59 branches or agencies; Barclays Bank with 55; and Finance Bank Zambia with 51 (2012). Banks listed on the Lusaka Stock Exchange in 2009 include Cavmont Merchant Bank, Investrust Bank, Standard Chartered Bank and Zambia National Commercial Bank (2010). There is a wide range of financial services available in Zambia. The country boasts some 31 microfinance institutions, eight leasing companies, three building societies, one development bank, one credit reference bureau, 52 Bureaus de change and one savings and credit institution (2012).
Regulation of Financial Services
The Bank of Zambia has the responsibility of supervising the banking sector. The Bankers Association of Zambia, the industry body, has produced a voluntary Code of Banking Practice designed to encourage market competition and raise standards for consumers. In 2012, 14 banks had volunteered to follow the code. In assessing the soundness of banks Zambia achieves a respectable score of 5.4, equivalent to Jamaica and coming in above the world mean of 5.1.
Development of Financial Services
There have been significant developments in electronic payment systems. In order to improve risk management related to high value payments the Bank of Zambia runs an electronic service called Zambian Inter-bank Payment and Settlement System (ZIPSS). There are numerous other electronic and mobile payment services available which were designed to make transferring money between consumers and banks faster and more efficient. According to the 2011 World Bank Ease of Doing Business Index Zambia comes 7th out of 46 sub-Saharan African countries in overall ease of doing business. When it comes to getting credit Zambia is 2nd in the group, a strong position which is mirrored in its ranking in relation to protecting investors where it comes 13th out of 46.
The World Economic Forum’s Global Competitiveness Report (2012-13) gives Zambia a score of 4.5 out of a possible 7 for availability of financial services, equivalent to the world mean. The affordability of these services is assessed as 4.1 out of 7, also differing only slightly from the world mean. The World Bank reports that in 2011 21% of adults over the age of 15 held an account in a formal financial institution. In terms of ease of access to loans, Zambia ranks similarly to other sub-Saharan countries, such as Tanzania. In 2011, 6% of adults aged 15 and over had taken out a loan from a financial institution in the last year. Financing through local equity market is strong in Zambia, partly because of its established stock market. It achieves a score of 3.8, above the world mean of 3.5, and just below Malawi with 3.9.