Smart Village Limited pilots CBFIs while promoting solar energy solutions in Ngabwe District

Smart Village Limited is piloting formation of Community Based Financial Institutions (CBFIs) with support from RUFEP while promoting use of solar energy targeting the rural people of Ngabwe District.

Ngabwe is a remote rural area located about 170 Kilometers from Kabwe off the national grid and was accorded the district status by the late President of Zambia, Mr. Michael Sata on 13th April 2013.

While promoting the adoption and use of solar energy solutions targeting rural people off the national grid as the core business, Smart Villlage is piloting formation of savings groups to increase financial inclusion and incomes of the rural people in Ngabwe.

In April 2018, Smart Village accessed a grant from RUFEP under the Rural Finance Equity and Innovation Window (III) of the Innovation and Outreach Facility (IOF) matching grants to pilot formation of CBFIs in Ngabwe district.

The IOF grant from RUFEP worth US$25,000 to Smart Village Limited targets the formation of 15 savings groups in the newly created remote rural district of Ngabwe by November, 2019.

By 10th June, 2019, when RUFEP conducted field visits to assess progress by the implementing partner, Smart Village Limited had formed 5 Savings Groups in Ngabwe District.

Speaking during the field visit, Smart Village Project Manager Thandiwe Tembo said the formation of savings groups or CBFIs using the Village Savings and Loan Associations (VSLAs) model has been well received by the rural people of Ngabwe.

Ms. Tembo said Smart Village conducted a survey to assess how much the rural people of Ngabwe were willing to pay for the solar lighting products which indicated that 150 connections to the off grid home solar system were possible.

“So far 5 CBFI groups have been formed and we are targeting 10 more groups by the end of the year. From the pilot and the survey conducted by Smart Village Limited, so far at least 105 connections to the home solar system are possible”, she said.

Ms. Tembo said findings of the survey indicated that the rural people of Ngabwe will be able to afford the cost of the home solar system based on what they are currently paying for to light their homes and to charge their mobile phones.

Meanwhile, Smart Village Limited has connected Ngabwe Secondary School to the solar system to demonstrate how the home solar system works to the Ngabwe community by lighting the classrooms, boarding houses, and the school administration block.

Ngabwe Secondary School Headmistress Maureen Mpundu thanked RUFEP and Smart Village for their initiatives and support particularly to Ngabwe Secondary School. Mrs Mpundu said the solar system has now made it possible for pupils to study at night and made life much easier for the school.

She pleaded for more support from well-wishers as a number of school projects were abandoned by contractors citing high transport costs due to the remoteness of Ngabwe district.

IFAD Mission with Ngabwe Secondary School Headmistress Maureen Mpundu

ETP’s Agency Banking and Agrimalls provide liquidity for rural people’s cash withdrawals

Sales Agent helps a client to swipe the NATSAVE card at Nanjucha Sales Point

Entrepreneurship Technology Park (ETP)’s has set up two Agency Banking and Agrimall service points to provide access to financial services for the rural people in Western province.

The Agency Banking and Agrimall service points located in Nanjucha in Nalolo District and Tapo in Mongu District also acts as milk collection bulking centres and payment points for the rural farmers.

ETP received a grant worth US$200,000 from RUFEP’s Innovation and Outreach Facility matching grant’s Agency and Mobile Banking Window (II) in June 2017 which targeted to reach 3,500 farmers in selected districts of Western province.

By June, 2019, a check by RUFEP’s Knowledge Management, Monitoring and Evaluation mission revealed that 945 farmers were accessing financial services from NATSAVE and Airtel Money at the two service points in Nanjucha and Tapo.

The agency and mobile banking service points (Agrimalls) also stocks farming inputs and groceries providing the much needed liquidity for paying rural farmers using the NATSAVE Point of Sale system and Airtel Money.

Customer withdrawing cash at using Airtel Money at Tapo Agency Banking and Agrimall

ETP Manager Felix Mwansa told the RUFEP team during the field visit that while 110 farmers were issued with Automated Teller Machine (ATM) cards, about 16 were actively using the cards to access financial services.

Mr. Mwansa disclosed that while a number of rural farmers had some challenges on the use of ATM cards with NATSAVE, the majority were using Airtel money to do financial transactions.

“We purchased 150 mobile phones for farmers to use for mobile banking. Farmers are now able to withdrawal and deposit money using Airtel money and NATSAVE swipe machines at the agency and mobile banking service points (Agrimalls) without going to Mongu”, he said.

Meanwhile, Tonolo Cooperatives Chairperson, Mr. Luka Mulyata appealed to ETP to source a market for their members’ milk as most of the farmers who depended on milk sales for incomes were stranded following the closure of Zammilk Collection points in Nanjucha and Tapo.

RUFEP partners with PACRA to promote SME registration and access to finance

Stakeholders attending Consultative Workshop in Mongu

RUFEP has partnered with Patents and Companies Registration Agency (PACRA) to promote the growth of rural based informal Small and Medium Enterprises (SMEs) through formal registration and access to finance.

Under the programme for ‘Access to Finance by rural based businesses pursuant to the companies Act No. 10 of 2017 and the Corporate Insolvency Act No.9 of 2017’ RUFEP sponsored Stakeholder Consultative Workshops organized by PACRA across all the 10 provinces of Zambia.

The Stakeholder Consultative Workshops target to sensitize informal businesses predominantly SMEs in about 30 selected rural districts of Zambia in all the 10 provinces to ensure they are formally registered by PACRA. RUFEP partnered with PACRA under the Strategic Partnership Component 1 to conduct Stakeholder Workshops for rural based informal SMEs to encourage formal registration as a pre-requisite for accessing financial services.

Financial Services Providers (FSPs) deal with registered entities which are formally registered as a business name or a company to access financial services such as savings and credit finance.

PACRA Companies Senior Inspector Mr. Wilson Banda said the Stakeholder Consultative Workshops have been on-going since March 2019 and the response from the target beneficiaries has been very good.

Mr. Banda said the focus on the Strategic Partnership with RUFEP is on rural businesses that are often informal and characterized by poor corporate governance practices, hence unable to access finance.

“Business registration is key to credit financing. It increases the chances of accessing finance as financial services providers (FSPs) prefer to deal with formalized or registered businesses”, Mr. Banda said.

He said the recently enacted companies Act No. 10 of 2017 provides for enhanced corporate governance while the corporate insolvency act no. 9 of 2017 provides for rescue of financially troubled businesses by PACRA.

He was speaking during the Stakeholders Workshops in Kaoma and Mongu, Western province held from 17-21st June, 2019. In Western Province FINCA partnered with PACRA and RUFEP as FSP to promote financial literacy during the Stakeholder training Workshop.

During the Workshops, PACRA does on the spot registration of business names and companies which costs ZMW 166 to register a business name and ZMW1, 000 to register a company.