Dr Situmbeko Musokotwane, the Zambian Minister of Finance and National Planning, recently announced that Zambia would extend its five-year financial sector development plan (FSDP), which had originally been slated to expire in 2009, to 2012 in an effort to build better financial infrastructure for different income groups.

The FSDP contains plans to establish a legislative framework to provide effective regulation and supervision of rural banks and microfinance institutions (MFIs) [2]. “Access to a well-functioning financial system has the potential to empower the poor and low-income people as well as micro-enterprises economically and socially” [1] said Dr Musokotwane. According to an unspecified survey released on the same day, only 10 percent of small and medium-sized businesses are banked, and 3.8 percent of adults have insurance. As of 2009, 3 MFIs in Zambia report data to the Microfinance Information Exchange, the microfinance clearing house, with an aggregate) loan portfolio of USD 5.4 million and 22,174 active borrowers [3].

By Trevor Kwong, Research Assistant

Additional Resources and Sources:
[1] Source Article: Lusaka Times: Zambia: The poor weigh in on the state:
http://www.lusakatimes.com/?p=28858

[2] Financial Sector Development Plan 2004-2009:
http://www.boz.zm/FSDP/ExecutiveSummary.pdf

[3] Microfinance Information Exchange: Zambia:
http://www.mixmarket.org/mfi/country/Zambia/profile/flatstore_mfi_mfdb_data.mix_diamonds__c,balance_sheet_usd.gross_loan_portfolio,products_and_clients.total_borrowers/2009/

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