Village banks on the rise in Zambia
Written by Millennium on June 22, 2019
BUUMBA CHIMBULU writes
THE number of village banks in Zambia has increased to 195 with total funds standing at K12, 726,400 as at end 2018, says Kansanshi Mine sustainability and livelihood officer, Golden Kontakonta.
Mr Kontakonta said village banks grew to 195 in 2018 from 74 at the end of 2017, made up of 7,468 women and 510 men.
Commenting on some of the village banks in and around Solwezi District guided by some companies, Mr Kontakonta said each group was completely autonomous and self-funded by its members.
Together, these banks saved a whopping K 12,726,400 during the course of 2018.
Mr Kontakonta said in a statement that Kansanshi did not provide start-up capital and was not formally affiliated to those banks.
He however said his company provided training and guidance where needed.
“We provide the training and guidance where needed. We also provide each bank with ledgers and a vault: a metal box with three locks on it. No one person can open the vault by themselves,
“A group of ladies get together to form a Village Bank – typically around 25 of them – and they decide on a monthly investment amount. It has to be something they can all afford,” he said.
Mr Kontakonta explained that members collectively determined the interest rate for each loan.
At the end of each year, he said, they had their close-out and everybody received their investment, plus all the interest they earned.
“Every month they get together to put in that amount, and they invite everybody to apply for a business loan. They evaluate the applications as a group, and generally approve four business loans at a time, “These loans are approved based on the members’ knowledge of their market. They always know the people they are lending the money to which reduces the risks,” Mr Kontakonta said