Financial inclusion crucial to economic growth


FINANCIAL inclusion has remained an important determinant of economic growth; hence the need for financial literacy, especially among smallholder farmers in rural areas, says Zambia Institute of Mass Communication Educational Trust (ZAMCOM) executive director Oliver Kanene.

Mr Kanene said his institution was worried with the level of financial illiteracy especially among small holders who greatly contributed to the Zambian economy.

He was speaking during the signing of the memorandum of understanding (MoU) between ZAMCOM and the Zambia Cooperative Federation (ZCF) in Lusaka aimed at providing financial literacy to communities, particularly small holders.

“What has been worrying us at ZAMCOM most of the time is that demand side of financial inclusion has not been attended to,” he said.

Mr Kanene said financially educated consumers could benefit the economy by encouraging genuine competition, forcing service providers to innovate and improve their levels of efficiency.

He said financial literacy could be seen as the first step towards alleviation of poverty and development in Zambia.

“In Zambia, the need for financial literacy is even greater considering the low levels of illiteracy and the large section of the population, which still remains out of the formal financial set-up especially in rural areas,” he said.

He said the partnership would work with key stakeholders to help smallholder farmers increase productivity; demand financial services while helping Government and other players achieve the financial inclusion goal.

Mr Kanene said the institutions would work with 60 community radio stations in sensitizing the public to promote financial literacy.

Meanwhile, ZCF director general James Chirwa said lack of financial information had contributed to levels of poverty in Zambia.

Mr Chirwa said financial illiteracy was among other factors leading to high poverty levels, hence the need for sensitization and offering correct information.

“One of our weaknesses in the cooperatives to reach out to members and lead to high poverty levels is lack of information and financial illiteracy is one of them. We will get information to the people when they need it through this development,” he said.

He said about 60, 000 people would be captured through this development.

“The partnership would go a long way in meeting expectation through this development. This will foster advancing financial literacy to the majority of people not in a position to access such development,” he said.