Zambia has made improvements over the years in terms of financial services delivery outlets/channels offered by both the formal and informal financial institutions. Despite that, the level of adults Zambians above 18 years who are excluded from financial services remains significant. The comparison between the baseline survey 2019 and end line survey conducted in 2020 by RFDP Zambia in Lundazi, showed improvement on the number of the financially excluded adult population, The results of the survey of financial outlets in Lundazi indicates that while the urban areas are well covered in terms of financial services outlets, the rural areas have a long way to go even after taking into consideration the VSLAs and mobile money outlets such as Zanaco express, airtel, MTN and Zamtel.
Based on the assertion above, financial exclusion is still prevalent in Zambia and in Solwezi, Kalumbila and Mushindamo districts of the North-western province of Zambia in particular. According to the end line survey conducted by RFDP Zambia in Lundazi district, Eastern province of Zambia, 29% of the local population in Lundazi were financially excluded, 33% of the respondents did not have access to mobile phones which is a prerequisite for digital banking platform (RFDP Zambia End Line Report, 2020) and all these people were from the rural areas. According to the Fin Scope survey of 2014, 63% of the total population in Zambia was financially excluded. In rural areas, women had higher rates of financial exclusion. 66% of women were excluded from financial services compared to 59% of men. Rural areas had levels of exclusion also at 66% compared to 58% in urban areas (New Faces, New Voices, 2014).
The situation is not different with the women in the target districts of Solwezi, Mushindamo and Kalumbila rural communities. These Women face significant barriers to maintaining and expanding their businesses due to inaccessibility of formal financial services, limited access to capital, and lack of technical skills. There are few FSP providers who provide financial services to the people of North-western province. Most of the VSLAs in the target districts are still using the traditional way of accessing financial services through the group lending and savings using a box to save the money rather than using the modern way of lending and saving through digital banking platform where the savings are made through the phones and savings are kept digitally on phones. Poor women have long been a risky group for giving such loans by the banks. This has made poor people in the remote district not to have access to financial services.
It is for this reason that RFDP Zambia has partnered with Rural Finance Expansion Programme RUFEP to implement the Sustainable Financial Inclusion and Linkages Project to tackle both the supply side and demand side bottlenecks to financial inclusion. The project will explore and promote increased financial services delivery channels and linkages between RFDP Zambia ‘s CBFIs in the target districts and MFinance including providing an enabling environment for the creation of MFinance Agent Banking model.