Paliwal calls for closer integration of mobile money, banking to boost SME lending

He said expanding access to financial services beyond traditional urban centres remained important, citing figures indicating that more than 75% of registered businesses were concentrated in two provinces, while the remaining eight accounted for 25%.

Paliwal said mobile money had expanded financial inclusion over the past decade, with integration between mobile money operators and banks allowing customers to transfer funds between mobile wallets and bank accounts.

He cited International Monetary Fund data released about a year earlier showing that financial inclusion had risen to 79%, from between 50% and 60% previously.

However, he said more than half of businesses operated without bank accounts, relying instead on mobile money, making it difficult for lenders to establish their turnover and assess their ability to repay loans.

Paliwal said improved access to financial records could help banks extend credit to businesses, including those operating in mining supply chains on the Copperbelt.

He also said Zambia’s loan-to-deposit ratio remained below 45%, meaning banks lent less than 45 Kwacha for every 100 kwacha held in deposits.

Increasing the ratio to between 50% and 55% would create room for greater lending to businesses and support economic activity, he said.

The figures on SME contributions to gross domestic product and employment, the proportion of businesses without bank accounts, and the loan-to-deposit ratio are attributed to Paliwal and have not been independently verified.

WARNING! All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express permission from ZAMBIA MONITOR.