Drop in savings scares commercial banks


THE current economic challenges in Zambia have posed a risk for banks to lend out money to the public because balances in  savings accounts have considerably reduced, says Cavmont bank chief executive officer Charles Carey.

Mr Carey said commercial banks in Zambia were facing difficulties to lend money to the public because savings in customers bank accounts were reducing at  an incredible rate.

“What affects the economy, affects banks. It affects us as much and our commodity earnings which are savings, affect Zambia’s economic activities,

“This is a risk to the industry when savings are reducing,” he said.

He said the banking sector had multiple products and promotions aimed at driving the sector but that’s the culture did not seem to be valuing the impact of a strong savings culture.

He said the role of the banks was to find ways and channels to increase access to the financial sector.

“And the risks are that the exchange rate is now volatile and the inflation rate is escalating, the value savings has become more dynamic,

Mr Carey said that a successful banking industry would be when there was 100 percent of banked population because then the cost of borrowing would probably go down if many people saved their money.

Meanwhile, Ecobank managing director Kola Adeleke appealed to the public to adopt the culture of saving as it would help them in the time of need.

Me Adeleke said the current economic challenges must be a lesson to those who did not save because those who did so way back were now using their monies to adapt to the current status of the economy.

He said the impact on people who started saving way back was less than those who did not save.

“What is happening in the economy right now should be a wakeup call for everyone in the country because this is one of the reasons why people must save. You can start saving small and when times are hard, you can rely on the small savings for some needs you need to take care of at this time,” he said.

And Investrust bank managing director Dr Richard Chembe said the current environment made it critical for citizens to save.

Dr Chembe said those who had the knowledge on how best to save were probably thanking this time because their savings were helping them with their needs.

“This issue of saving in an environment that we are in is critical in its nature. Most individuals now would find it very difficult to cope with the environment,

“It is a critical time to call on citizens to save; so I think it’s important that we put our people into a culture of saving so that they can fall back on their savings in times like we are in,” he said.