TRANSFORMING INDUSTRY, DEVELOPING ZAMBIA
TWO weeks ago, we began a series on the Banking Sector’s response to the out-break of the 2019 Novel Corona Virus (COVID-19). In last week’s edition, we featured a special write-up from the Bankers Association of Zambia (BAZ) Chairperson-Mr. Herman Kasekende, who shared his opinion on the operations of the banking sector in the new normal.
This week, we would like to share insights on personal financial planning and preparedness during the period of the pandemic.
As the COVID-19 continues to wreak havoc across sectors globally, the financial year 2020 began with a lockdown in many countries, leading to a lot more people having to work from home. With the already pre-existing economic challenges facing the global economy, the COVID-19 pandemic has not spared economies like Zambia. High inflation in the country, a slump in commerce and trade, a drop in mining productivity, fluctuating international copper prices are amongst other factors that were already affecting the country’s economy, prior to the outbreak of the pandemic.
The Outbreak of COVID-19 in Zambia in March this year, saw several economic sectors affected following the slowed economic activities because of the lockdown across the various productive sectors of the economy.
However, according to Chakrabarty (2020), the lockdown period offers the best opportunity for re-organisation and rebuilding of one’s
Coronavirus, also known as COVID-19,
BANKING plays an integral role in the development of commerce and industry in any economic dispensation. In this regard, banks play an important role in the creation of new capital investment (or capital portfolios, formation) by way in of checking a country on and the thus outhelp come the of economic various financial growth products process. to The achieve banking life goals. system According facilitates to the Chakrabarty, intermediation this of is internal because, and the
COVID-19 may hit the economic landscape of develinternational oping countries trade. harder, and successes in containing
the The pandemic, history could of the result banking in economic sector recession. in Zambia The dates results as and far back effects as of 1906, recessions when are the reason first commercial enough for bank-Standard financial planning. Chartered Bank was established, with it first “Fortunately, branch opened there in are Kalomo wise moves District one of can Southern make to Province. stabilise In their the last finances 114 years as efforts of the existence are made and at houseoperation hold, of community, the commercial national banking and global sector levels, in Zambia, to flatten the country the curve currently of the pandemic”, has 18 registered he explained. commercial banks.
Below are some of support the tips one businesses could embark and upon Taking personal into level account to mitigate the critical the effects role of played the economic by the households at that are being impacted by
sector challenges in the because provision of the of banking COVID-19 services pandemic. to all sectors COVID-19. of the economy the existing banks in the country realised The the TMTFF importance identifies of establishing key economic an umbrella body sectors that would as outlined effectively represent in the the country’s interests of the Seventh sector. National Development Plant
It was against this background that in 2008, the
(7NDP) which should access funds
Bankers Association of Zambia (BAZ) was formal
from the Bank of Zambia, through
ly registered. Prior to the establishment of BAZ, the
their respective FSPs,
Association operated informally with the chairing
The sectors identified by the 7NDP
bank in a particular year, offering all related secretarial include services, the as well following, as coordinating agriculture, all activities of the manufacturing, membership. The Association’s tourism, role and has energy, overtime evolved which to qualify include the for promotion up to 60 of efficiencies, percent of innovations these and funds. industry Other growth and sectors positioning include member-banks to continue supporting both private sector
households and non-financial
and Government economic agendas enshrined in the
corporates who qualify for the
country’s National Development Policies.
remaining 40 percent. and Exchange Commission.
BAZ is a mouthpiece of the banking sector and is mandated to address various matters of common industry interest through lobbying, advocacy and policy influence. The Association aims at facilitating the
onward lending to households, industrial and innovation growth of the sector, as well
MSMEs and businesses as building sustaining good-will and public confidence K10 in the billion commercial has banking been put sector. aside One of for the ways this this purpose mandate is by realised the Central is through Bank, engagement and with tenors critical of Government five years agencies for targeted and ministries sectors as well as other critical stakeholders in the Zambian econ
(agriculture, manufacturing, tourism, omy.
and energy) and three for other sectors including households.
The FSPs Bankers will Association access of this Zambia facility works with from its members BoZ at to provide 10.25 analysis, percent. advice This and advocacy interest and contributes rate is arrived to the development at by taking of public the current policy on banking and other financial services.
Monetary Policy Rate (MPR) of 9.25 The Bankers Association of Zambia works to ensure
percent and adding 1 percentage that the banking system can continue to deliver the benefits point. of Further, competition FSPs to Zambian will banking have a customoneers. year grace period (moratorium) for both principal and interest payments on the facility, which was made available from April 15, 2020.
HOW WE WORK
The Association also works to ensure that the banking industry views are put forward when government determines policy or legislation. Many areas of law and including international law impact upon the interests of commercial banks in Zambia.
For example, issues of micro and fiscal policies and financial sector reform affect the trading environment for banks in Zambia and the Association consults its members These to form funds industry can position be on accessed many such by issues. households With the active and participation businesses of the through member banks, the Bankers Association of Zambia works to fos
their respective FSPs, such as
ter an environment in which financial services are val
Commercial Banks and other licenced
ued and can prosper. In communicating the industry’s
and regulated FSPs.
views, the Association works with Government, the regulators, other industry associations, the community, community groups and the media.
Some of the initiatives that the Bankers Association of Zambia Basically, is working all on businesses in collaboration are with eligible the Bank of Zambia and other key stakeholders include the fol
as long as they have a need and are
lowing: -
in good standing with their respective FSPs. However, priority will go towards supporting sectors that will propel economic recovery and stimulate private Lastly, if you sector are capable led growth. enough, use your money to assist relatives, friends, and the broader community- a little always goes a long way.
FSPs determine the interest rates at which the funds will be on-lent to their clients. However, FSPs are obliged to pass on the benefits of lower flexible