BoZ Pledges Support To Village Banking

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The Bank of Zambia (BOZ) has reiterated its support to village banking and savings groups, saying they play an important role in providing community-based financial services although informally. In a statement on Wednesday, the Central Bank stated that financial services are delivered through the formal and informal channels. “Formal financial service providers include banks, non-bank financial institutions, and insurance and investment firms. These institutions are licensed, regulated, and supervised by regulators in the financial sector, namely, the Bank of Zambia, the
Securities and Exchange Commission and the Pensions and Insurance Authority,” the BoZ stated. “Informal financial service providers include individuals or groups of people that are not licensed nor regulated by the state or financial sector regulators. Examples include chilimbas and village banking/savings groups. Village Banking/Savings Groups Village banking/savings groups are small savings and lending schemes organised outside the formal financial sector. As the term “village” implies, membership is usually among people who are familiar with each other and share certain commonalities through their family, friends, and community.”

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