Zambia was the earliest adopter of digital financial services (DFS) in Africa. The country has a diverse and competitive market, primarily focused on payment services but faces a diversity of challenges to reach its full potential.
Despite being on par with transaction volumes, agents’ revenues and profitability are lower than in other East African countries, explaining the slow growth of agents. A number of providers offer services or would like to offer services using digital channels but there has been little success or growth due to low capacity internally to meet growing customer needs. As agency banking takes shape in Zambia, financial service providers and mobile financial services providers are testing a number of different models, including building proprietary agent networks to facilitate banking transactions and partnering with the two largest mobile network operators, Airtel and MTN to leverage existing agent network channels to perform transactions on behalf of bank customers.
MM4P joined hands with Financial Sector Deepening Zambia (FSDZ) to launch its programme in Zambia in 2015 focused on accelerating uptake and usage of DFS.
Where We Are
What We Did So Far
- Recruited and hired MM4P’s Country Technical Specialist
- Launched the Digital Financial Services Working Group (DFSWG)
- Finalized the terms of reference (ToR) and sent out a RFP for Bank of Zambia’s (BoZ) DFS capacity building and data collection processes
- Finalized the job description for hiring a Senior Policy Advisor
- Did the procurement to facilitate building the National Payment Switch with government and private stakeholders
- Did the procurement to conduct survey of policy/regulatory needs of the Pay-As-you-Go (PAYG) sector
- Finalized the analysis of the agent network accelerator surveys
- Received the first draft country report and 2 provider reports
- Had The Helix post training follow up sessions with providers’ SMT and received reports
- Engaged 5 providers with The Helix reports with a view to develop project descriptions aimed at improving agent quality
What We Plan for This Year
- Increasing Regulatory & Policy Capacity Building; Improving DFS Data Collection methods and outcomes; Improving Regulatory & Policy Gaps between multiple regulators
- Assisting Bank of Zambia and ZECHEL on creating a process and rule architecture around the National Switch that can lead to low-cost, comprehensive buy-in of all (or almost all) financial service providers in Zambia. There may also be a need to support the Zambian market to address the regulatory and policy needs for the burgeoning Power/Energy PAYG sector
- Support providers to address their needs at an operational level, within organizations, and possibly partnerships between providers
- Work with DFS Service providers to address challenges with Agent Networks, with a focus on liquidity management and agent training
- Respond to requests from government Ministries to assist their use of DFS for Social Cash transfers; Conduct a Payment Diagnosis of Government Payments
- Work with DFS Providers to use Human Centered Design to create products and marketing that meet the needs of the Zambian consumer