By BUUMBA CHIMBULU
THE Bank of Zambia (BoZ) has no intentions of clamping down on village banking as it plays a role to enhance financial inclusion in the country, says BoZ Director-Non-Bank Financial Institution Supervision, Freda Tamba.
Ms Tamba said the Central Bank recognised that village banking was a tool that played an important role in expanding financial inclusion.
She was speaking at the weekend when responding to concerns form the public that BoZ will clamp down on village banking.
Ms Tamba, however, mentioned that the Central Bank was encouraging village bankers to migrate to formal way of saving their money such as opening bank accounts.
“I must say very categorically that the bank has no intention to move in and clamp down on them but we are encouraging savings groups to move outside this informal arrangement to the formal one. We will not clamp them down on them,” Ms Tamba emphasised.
Ms Tamba said village banking was a stepping stone towards the formal from informal sector in terms of financial inclusion.
She said the practice was risky as it involved a large amount of cash which could easily be stolen and that the practice also limited participants from conducting certain transactions.
The Central Bank, Ms Tamba said, was hoping to work with institutions such as the Financial Sector Deepening Zambia who were working with registered saving groups.
Ms Tamba said “In fact what we have seen is that some formal service providers like commercial banks and mobile network providers are also working saving groups to design products will assist them work with informal financial service providers.”