Impact Story
Zambia Launches Second National Financial Inclusion Strategy
Challenge
Zambia has made significant strides in expanding access to finance for its population. Through the implementation of the first National Financial Inclusion Strategy (NFIS), which was built on the government's earlier commitment to improving financial inclusion, the country saw the level of financial inclusion rise to approximately 70% in 2020, up from 60% in 2015. This is a commendable achievement, especially considering the development challenges it had to grapple with, including an external debt crisis and the COVID-19 pandemic.
Despite these positive developments, Zambia continues to confront persistent challenges in this area. Findings from studies, including the 2020 FinScope Survey Report revealed that vulnerable segments of Zambia’s population, including rural communities, women, youths, senior citizens, persons with disabilities, and refugees, remain underserved by the financial system. This underscores the need for targeted solutions to ensure financial system can be more effectively leveraged to enhance inclusive growth. Additionally, MSMEs (Micro-, Small, and Medium Enterprises) and the agricultural sector – two critical areas for job creation and the country’s economic transformation – continue to face constraints such as high borrowing costs and limited awareness of available financial products.
F4D Support
With the support of the World Bank through the Finance for Development (F4D) Umbrella Program, the Government of Zambia has taken a step towards fostering an enabling policy environment, enhancing collaboration with the private sector, and strengthening interagency cooperation to achieve its 85% financial inclusion aspiration by 2028. This support, which includes a review of NFIS, technical assistance, knowledge exchanges, and stakeholder consultations, underscores the collaborative efforts and shared commitment to reinforce Zambia’s policy approach's effectiveness in tackling financial inclusion challenges.
Launched in March 2024, the second National Financial Inclusion Strategy (NFIS II) outlines six broad-based thematic areas that address the challenges to ensuring financial inclusion for all and include two cross-cutting areas to optimize the strategy's operationalization. Notably, NFIS II includes a specific thematic area aimed at addressing challenges related to climate change by promoting the use of financial products and services to support adaptation and mitigation strategies.
F4D support enabled the Drafting Committee of the NFIS II to engage a financial inclusion expert instrumental in spearheading the drafting process and organize knowledge exchanges on two critical fronts: financial inclusion strategy implementation in a global context as presented by World Bank experts and with Indonesian financial sector authorities on their experience in implementing financial inclusion reforms and operationalizing financial inclusion strategy. F4D’s assistance package also facilitated ongoing engagement with public and private stakeholders, which was critical to ensuring a comprehensive and informed approach to the development of the strategy.
Collectively, these efforts have helped the Government of Zambia align the NFIS II with international best practices while also adapting it at the country level, where financial inclusion is seen as an opportunity to catalyze sustainable and inclusive growth.
NFIS II now provides a detailed roadmap to accelerate financial inclusion across demographic and economic sectors. NFIS II is structured with a multi-tiered governance framework made up of steering and implementation committees, six working groups, and a Secretariat led by the Ministry of Finance and National Planning. It also articulates a comprehensive action plan that tackles each thematic and cross-cutting area and is anchored by a detailed results framework encompassing 59 indicators.
“The process of developing the second national financial inclusion strategy involved extensive collaborative engagements with relevant stakeholders from both the public and private sectors. It therefore reflects aspirations of not only government, but all sections of society at all levels.”
— Honorable Dr. Situmbeko Musokotwane, Minister of Finance & National Planning
The targeted action plans of NFIS II will not only address the needs of underserved communities and critical economic sectors, but also introduces focused measures to enhance financial literacy and education, strengthen consumer protection, and better leverage the potential of digital financial services.
NFIS II and the Review Report of NFIS I were officially unveiled by the Honorable Dr. Situmbeko Musokotwane, Zambia’s Minister of Finance and National Planning, on March 13, 2024. At the event, Dr. Musokotwane highlighted the need for continued collaboration to achieve the ambitious targets set forth in NFIS II. He also formally launched the Secretariat and the working groups that will spearhead the implementation of NFIS II.
The NFIS II strategy document is the result of the generous contribution of the Swiss State Secretariat for Economic Affairs (SECO) and comprehensive and sustained efforts undertaken by financial sector authorities and development partners, including Financial Sector Deepening Zambia (FSD Zambia), and UN Capital Development Fund (UNCDF).
National Financial Inclusion Strategy Materials
Video Overview of the Zambia National Financial Inclusion Strategy
National Financial Inclusion Strategy Zambia 2017-2022 Review Report
National Financial Inclusion II 2024-2028