2006年-世界发展银行全球_Access_to_Financial_Services_in_Zambia_36页_377kb

Summary of Access to Financial Services in Zambia

Core Content

This paper analyzes the challenges in developing a large and inclusive banking system in Zambia despite financial sector liberalization in the early 1990s. It highlights the lack of access to financial services for the majority of the population and the private sector, and explores the reasons behind this situation, including macroeconomic and institutional factors. The paper also suggests pro-active policies that could help improve access to finance in both the short and long terms.

Main Points

• Financial Sector Liberalization: In the early 1990s, Zambia liberalized its capital account and implemented market-based reforms, leading to the entry of new domestic banks and expansion of foreign banks.

• Current Banking System Status:

  • The banking system is dominated by foreign banks, which hold 73% of total assets, 79% of the lending portfolio, and 69% of deposits in 2005.
  • The three largest foreign banks (Barclays, Standard Chartered, and Stanbic Bank) control 50% of assets, 55% of loans, and 49% of deposits.
  • The capital adequacy ratio of all commercial banks in 2005 was above the minimum level of 8%, and the non-performing loan ratio was 8.9%.
  • Despite these improvements, the banking system remains small and underdeveloped, with total assets amounting to US$1.7 billion, or 35% of GDP in 2005.

• Access to Banking Services:

  • Only 8% of Zambia's adult population had a bank account in 2005, one of the lowest ratios in Sub-Saharan Africa.
  • Credit to the private sector represented 8% of GDP in 2005, slightly lower than in 1990.
  • Credit to households is scarce and expensive, with average annual interest rates at 48%, far exceeding the inflation rate of 20%.
  • Microfinance institutions (MFIs) serve only 50,000 customers, or 0.005% of the population, and are not allowed to take deposits from the public.

• Barriers to Access:

  • High minimum balances for opening and maintaining accounts prevent most Zambians from accessing basic banking services.
  • Low interest rates on small savings accounts, combined with high inflation, cause the real value of savings to erode significantly.
  • Institutional and legal deficiencies such as the collective ownership of land and the lack of effective judicial procedures hinder collateral generation and loan recovery.

• Impact of Liberalization:

  • Liberalization did not lead to the expected benefits due to poor sequencing of reforms, weak payment systems, and lack of a supportive legal and regulatory framework.
  • The fiscal deficit (which reduced from 6% of GDP in 2003 to 2.3% in 2005) has limited the availability of funds for private sector financing.
  • The regulatory framework has improved, but key weaknesses in central bank independence, insolvent bank management, and anti-money laundering remain.

• Need for Pro-Active Policies:

  • The government needs to use market-friendly instruments to promote access to financial services, especially for the poor and SMEs.
  • Microfinance institutions should be integrated into the Bank of Zambia supervision to enhance stability and protect depositors.
  • Government intervention may be necessary to provide market infrastructure, such as renting post office space for bank branches in rural areas or subsidizing transaction costs.
  • However, such interventions should avoid distorting competition or awarding subsidies in a non-competitive manner.

Key Information

• Banking System Growth: Between 1992 and 1994, 10 new banks were established, but nine failed between 1995 and 2001, leading to foreign banks gaining dominance.
• Rural Branches: The number of rural branches decreased by 15% over the last decade, from 77 to 65, while urban branches increased.
• Minimum Balances: Five banks require a minimum balance of $16 to $78 to open an account, and five others require $156 to $313. These are prohibitively high for a population where 71% live on less than $1 per day.
• Deposit Distribution: 64% of accounts have balances below Kwacha 320,000 or $100, and 10% of account holders hold 85% of total deposits.
• Credit Bureau: A credit bureau is being set up by the Bankers' Association, which is a critical step to improve market information and credit culture. It should be expanded to include positive information and eventually cover SMEs.
• Regional Integration: There is potential for regional integration through regulatory harmonization, but Zambia shows little willingness to sacrifice regulatory autonomy.

Conclusion

Zambia's financial sector liberalization has not led to significant improvements in access to banking services for the majority of the population. The dominance of foreign banks, high minimum account balances, weak legal and regulatory frameworks, and high interest rates have all contributed to the limited outreach of the banking system. While some progress has been made, proactive government policies and improved regulatory frameworks are needed to promote financial inclusion and support the development of microfinance institutions.