FINANCE Minister Felix Mutati has implored commercial banks to implement mechanisms that will exempt poor rural communities from paying bank charges to help accelerate financial inclusion in the country.
Mr Mutati said the Government was concerned that despite repeated calls for commercial banks to reduce the cost of maintaining bank accounts in rural areas, some institutions had maintained the costs, thereby excluding people in villages from accessing financial services.
The minister said it was for this reason that the Government was considering reviewing the Banking and Finance Services Act to make it law for banks to exempt rural communities from bank charges in an effort to accelerate financial inclusion.
“Find mechanisms that will remove bank charges on poor people in the rural communities. Why do you want to extract even the little that someone from the rural sector has?” Mr Mutati asked
“The problem we have historically is that we keep telling banks to reduce the cost of money and they keep telling us how expensive it is to run their branches.”
The minister said this in Chilanga yesterday when he officially opened a two-day workshop for the stakeholders’ consultative forum for the draft national financial inclusion strategy, which was attended by Secretary to the Treasury Fredson Yamba and various financial sector players.
Mr Mutati said the high cost of borrowing was making it difficult for the country to accelerate financial inclusion, which was vital to national development.
He appealed to participants to expedite deliberations and ensure that the draft contained recommendations that would simplify banking and address the needs of various sectors.
Mr Mutati said the document should be launched next month to enable the Government design a legal framework that would break barriers in accessing finance by the majority and help increase financial inclusion to over 85 per cent by 2022.
Mr Yamba said that although Zambia had made strides in financial inclusion, which stood at 59.5 per cent in 2015 from 37.3 per cent some years earlier, barriers still existed that needed to be fought to achieve high level financial inclusion in the country.
The Government was confident that implementation of the strategy would, among other benefits, result in enhanced consumer protection, innovative and diverse financial products and help Zambia achieve greater availability and affordable financing for small and medium enterprises.
World Bank Group country manager Ina Ruthernberg lauded the Government’s efforts in drafting the strateg,y which required concerted efforts from all stakeholders in order to succeed.