National financial inclusion in Zambia has increased from 59.3% in 2015 (Finscope, 2015) to 69.4% by 2020. This is according to the FINSCOPE 2020 topline findings released by December, 2020.
Rural financial Inclusion also increased from 50% in 2015 (Finscope 2015) to 56.9% by 2020 according to the FINSCOPE 2020 Survey findings.
According to the Finscope (2020) Survey findings, the increase or growth is mainly attributed to increased uptake of mobile money which registered an increased from 14% in 2015 to 58.5% by 2020.
The Topline findings were released at the Finscope (2020) Survey Dissemination Workshop held on the 17th December, 2020 at the Radisson Blu Hotel in Lusaka organized by Bank of Zambia (BoZ).
Presenting the findings, BoZ’s Financial Sector Development Assistant Director Brenda Mwanza (BoZ) highlighted that informal financial inclusion declined from 37.9% in 2015 to 32.3% by 2020 as more adults were using formal financial inclusion.
“On gender, while the female population increased to 52.6% from 50% in 2015 and the male population declined to 47.4% from 49% in 2015, males are more financially included (71.8%) as compared to females at 67.9% by 2020”, Ms. Mwanza highlighted.
She added that formal financial inclusion was in the age group between 26-35 years (69.3%) and lowest in the age group of 66 years and above.
Financial Health is the ability of individuals to use financial services to manage daily needs, protect themselves from shocks and help them achieve their main goals.
The FINSCOPE 2020 Topline Findings included baseline findings on financial health and literacy which were presented by Financial Sector Deepening Zambia (FSDZ)’s Director Analytics, Mr. Floyd Mwansa.
The survey findings showed that only 13.6% of the adult population was financially healthy.
“Adults in urban areas were found to be more financially healthy at 15.8 % than rural counterparts (11.7%). Males were more financially healthy 14.2% compared to females at 13.1%.” Mr. Mwansa disclosed.
Financial literacy refers to awareness and knowledge of key financial concepts required for managing personal finances. The survey findings indicate that the urban population had high financial literacy (31.9%) than the rural population(16.2%).
Further males were more financially literate than the females while the level of financial literacy increases with education levels.
Speaking during a Panel Discussion, RUFEP Programme Coordinator Michael Mbulo said more sensitizations were needed to convince rural people on the reality of mobile money to increase uptake.
Mr. Mbulo said RUFEP was working with implementing partners such as World Vision, Atlas MARA, FINCA, Kasama Christian Community Care (KCCC) to promote digitization of Savings Groups and uptake of mobile money.
He said digitizing Savings Groups through use of mobile money is much safer as Treasurers do not need a box to put money but use their mobile phones to save which is much efficient.
“To increase mobile money uptake, rural people need sustainable access to power to charge their mobile phones. RUFEP is also working with solar energy providers to provide access to power and to promote of mobile money-based payments.
FSDZ Chief Executive Officer Betty Wilkinson said digitization of savings groups is much safer by promoting cashless transactions as touching money is the biggest risk in the wake of COVID-19 pandemic.
She said FSDZ was working with Chiefs to share information on COVID-19 and sensitizing communities on health requirements such as washing their hands through various media platforms.
“FSDZ conducted a survey to assess the impact of COVID-19 on households in Zambia. The survey revealed that families have been negatively affected by the pandemic and those who borrowed were failing to pay back loans. People are losing jobs and business and are selling their assets to cope with the failing economic situation due to COVID-19”, Ms. Wilkinson disclosed during the Panel Discussion.
And German Savings Bank Foundation for International Cooperation Representative Reinhold Hörnle said while the findings of the FINSCOPE 2020 were critical, there was need to increase rural financial inclusion.
Mr. Hörnle said there was need to harmonize the level of effort by all stakeholders as more needs to be done to increase financial inclusion.
The National Financial Inclusion Strategy (2017-2022) targets to increase rural financial inclusion to 75% and national financial inclusion to 80% by 2022.