Zambia

Case Studies CARE PROSPECT Project Micro Bankers Trust (MBT) National Savings and Credit Bank (NSCB)

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Case Studies

CARE PROSPECT Project
Summarized from: Use and Impact of Savings Services among poor people in Zambia", 2001
By David Musona, Gerhard Coetzee

CARE PROSPECT project is a community empowerment initiative sponsored by CARE International. The microfinance component essentially aims at providing the necessary environment and support which will enable target poor communities to have sustainable access to financial services. Therefore, in addition to objectives addressed by other components of PROSPECT, the microfinance component aims to establish community-based, self-managed financial services groups and systems among poor communities, to deliver efficient and sustainable micro-finance services to their members and therefore compliments other efforts of the project for reaching the goal of eliminating poverty and improves livelihoods.

Mandatory savings: the Group decides on how much each member will save with the Group each week when they meet. This amount is usually set within the capacity of the majority of the Group members to afford. No member may withdraw this mandatory savings because the Group uses it exclusively for loans to members. Mandatory savings are based on the Chilimba (ROSCA) where members in a Chilimba rotate savings, which are given to one member at a time.

Voluntary Savings: members of the Group may decide to save their extra money with the Group on voluntary basis. This money can be withdrawn by the member who saved it at any time she/he needs it, but within the general conditions set by the Group for withdrawing such savings. Because the Group may use this money to give loans to other members, the voluntary savings earn interest, which is decided by the Group.

Micro Bankers Trust (MBT)
Summarized from: "Use and Impact of Savings Services among poor people in Zambia", 2001
By David Musona, Gerhard Coetzee

Established in October 1996 with support from the government, MBT acts as a wholesale lending institution, serving MFIs from both the NGO sector and the private corporate sector. MBT takes its decisions independently, as to which MFIs receive support in the form of seed capital and/or capacity building. The MBT could be described as being at the intermediate stage, at the time of the study the outreach was 30 community based organisations and MFIs with about 7,000 active clients.The mission of the Trust is to empower poor people in Zambia through promoting micro-credit delivery, savings mobilization, group formation and training.

As at the time of the study the total loan portfolio was K1.6 billion. Most of the institutions receiving assistance from MBT use a group lending approach. The research team visited four community-based organisations (CBOs) funded by MBT. The four CBOs were using a village banking model with emphasis on savings and internal loans (to members). On average each of the CBOs had raised K250,000 from members savings which was lent to members on request, usually on the meeting day. The repayment period for these loans was on average 7 days with an interest charge of 10% per week. Repayment rate was reported to be very good, with most CBOs reporting no arrears.

National Savings and Credit Bank (NSCB)
Summarized from: "Use and Impact of Savings Services among poor people in Zambia", 2001
By David Musona, Gerhard Coetzee

National Savings and Credit Bank (Government owned) was formed in 1972. The bank was created to mobilize savings especially in rural areas. Initially the bank operated through the post office network countrywide. In 1992 , the bank decided to establish its own branch network.

The NSCB provides a wide range of services, which include the following:

• Ordinary savings account, with a minimum balance of K30,000 and interest payable at the rate of 8% per annum.
• Commercial savings account, with a minimum balance of K30,000. This account is designed for small and medium scale entrepreneurs who want to save a surplus of their income.
• Regular savings account, this account caters to customers who wish to save on a regular basis part of their income and the customer determines monthly instalments.
• Education savings account, this is intended for school boards PTAs and parents who wish to save for the purpose of developing their schools. It has a minimum balance of K150,000 and credit facility may be availed in relation to balances held.
  
  

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See also: Financial Sector Reforms and Savings Mobilization in Zambia, 2003, Maimbo, S. & Mavrotas, G.