Thursday, March 28, 2024

Barclays Justifies closure of rural branches

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Barclays Bank Zambia has admitted that it made a biggest mistake in closing rural branches in the country some five years ago.

Bank Managing Director Zafar Masud said the pulling out of the bank from rural areas was due to Zambia’s economic down turn during that time.

He said this situation was not conducive for the continued existence of the bank in remote areas at that time.

Mr Masud reiterated that the bank has strategically positioned its self to grow through capturing all the sectors of the economy.

Mr. Masud was speaking at the Euro Money workshop hosted by Barclays Bank under the theme ‘Sustainable Economic Growth through Microfinance and Small and Medium Enterprise (SME)’.

The Workshop was held on the sidelines of the Money Euro conference that opened in Lusaka , Zambia’s capital Tuesday morning. The participants have been drawn from the local business community and international investors.

He stated that financing for the SMES was available but pointed out that communication was lacking between the banks and the SMES on products that are on offer.

Speaking at the same function, Bank Head of SMEs Regina Mulenga said the bank in collaboration with other corporation partners has devised a mechanism, of risk sharing of finance.

She cited the United States Agency for International Development (USAID)as one of the strategic partners with whom the bank has entered into partnership.

She added other partners are also providing the technical support to SMEs to equip them with management skills to run their businesses.

And Finance and National Planning Deputy Minister Jonas Shakafuswa said Government has made strides in putting financing on course for national development.

He stated that Government’s decision to reduce domestic borrowing has created an opportunity for the financial sector to take advantage of other opportunities for investing their resources.

Earlier, Zambia Chamber of Small and Medium Business Association (ZCSMBA) Executive Director Maxwell Sichula complained that lack of access to financial services is a major hindrance for the growth of the small scale enterprise.

He stated that although the financial services do proclaim to offer SMEs service, the products on offer are beyond the reach of the SMEs.

And Bank of Zambia Deputy Government Danny Kalyalya stated that the mining sector is one sector that can give a boost to move the economy forward both in the short and medium terms.

Dr. Kalyalya said the sector offers the country both the competitive and comparative advantage hence the need to use the proceeds for other developmental programmes.

He was speaking at the Bank of Zambia workshop dubbed Macro economic Stability and Investment in Zambia.

He said the reduction in the inflation rates that the country experienced in the recent past has helped in facilitating enhanced investment.

He however pointed out that the escalating world food prices and soaring oil prices was a major threat to inflation.

ZANIS/ENDS/MK/CLM

36 COMMENTS

  1. people should learn to tell the truth. what is happening with Societe Generale in France is exactly what happened with Barclays 5 years ago. Why did they send that Mwanakatwe woman away. there were loop holes and when there are such one man is enough to strick and the whole system would shake. half a truth is a lie.

  2. Barcklays (Zambia) am still coming after you.Am very disappointed with the way they have misused my hard earned money, only for some idoit to charge me K60,000 has sevice charge.Imwe ba kabolala.I thought it was a good ideal to have an account in zed only for some opportuinsts to take liberties. Not a good way of selling your sevices to Zambians abroad.

  3. #2, is the service charge montly or yearly? Help us understand your grief with BBZ.

    Yes, the products on offer for SMEs are beyond the reach of many of the many. There are alot of bottlenecks and deliberate issues the raise when dealing with SMEs.

    Not quite in the diaspora. SMEs are treated with eateem coz Govts here regard them highly. Actaully they promote them heavily coz they form the baseline economies.

  4. Be careful with SME, they can lead to slavery again. This is a new way of economical colonialism. Remember in any success there is someone who is losing. If The father of microcredit was the one implementing this idea then I would have no problem.

  5. Tell me which economy has grwon on SMEs, my gosh if we are not careful, this is indeed neo-colonialism, but guess what the slavery in the mind where it is difficult to deal with even. And what does Masud mean when he says “we made a mistake” and then it the same breath “because the economy was not doing fine” what is he saying? This is what he is saying, we had a bad manager by the name of Margaret Mwanakatwe who almost ran the bank down, because if he blames it on the economy how come Finance Bank took over their rural branches and they made them profitable, son of a gun!

  6. #4 and #5, you seem to be missing out on what SMEs can do to an economy. In the EU, SMEs comprise approximately 99% of all firms and employ between them about 65 million people. In many sectors, SMEs are also responsible for driving innovation and competition. SMEs are the way to go if the citizens are going to be empowered economically. I cant really understand your fears or the lack of grasp on the issue.

  7. Sorry i meant to respond to No3.When i opened this account we agreed that the monthly charge will be K10,000 which i thought was cool but to my surprise they ‘ve been charging me K60,000.I launched a complaint to one senior customer service personel all she told me, that this was zambia and not UK.I was left with no words tp to say.She later admitted the fought and promissed they would pay me all my cash within 48 hours,up to date am still waiting to be payed.Am done with Barcklays probably some one on this blog can advice me on which bank has good services.LT sorry to have hijack the tpoic. i thought it would be in line with sentiments.

  8. ….For your own information South Africa is trying to run away from things like SMEs to discourage Debt and encourage saving hence the ever increasing interest rates. So these people are moving to countries like Zambia because they simply have lost market in countries like South Africa. Take my advise-keep away from them and always carry a cross with you because they are so evil….ba satana

  9. Guys, I might be missing something here.How do you grow the economy if you ignore SMEs? I thought these are the pipo who create employment and the way to go “enterpreneurship” .Help me.You can succeed in saving in SA, pipo in SA spend 85% of income servicing debt.

  10. #6 give us the names of some of these SMEs in EU, that way we can then agree look at SMEs in a different light, excuse my pessimism about SMEs because for me those are gratified ntemba’s maybe, I am just not well informed, please educate me Muntuza

  11. Naming the SMEs in the EU wont help #11 get the gist of the issue. The long and short is SMEs are the backbone of any economy. They stimulate it in terms of competition, which invariably leads to competition. In any trade or business, debt will always be there. The challenge is being fiscally prudent and manage it. Debt is a component in a business situation if you like. Money must be a tool for getting a better life. How you get it is another thing for another time.

  12. Listen to my reasoning, let us take for example what is an SME in EU could be a business of not less than US$500,000, and an SME in Zambia a business of US$50,000. This is what I wanted to know in asking that question. At this point I do not seem to get the gist of the issue precisely. I am pro-debt as a matter of fact, I think when debt as you said is properly managed you can get the most out of it, this is what has made commercial farmers like Chilala what they are. Chindindindi (late) and Chilala were both commercial farmers at the same time, but guess what the former thought the economy will remain what it is for ever. I like the discussion #12 and I am open to new information.

  13. It appears to me that those of you dicrediting the importance of SMEs to the sustainable growth of any economy do not understand the basic meaning of what SMEs are. First, an SME is a company that employs not more than 250 people, has an annual turnover not exceeding 50 million euros, and an annual balance sheet total not exceeding 43 million euros. In the EU, this category of companies form an indisputable economic growth baseline through creating over 75 million jobs and representing 99% of all enterprises. The EU recognises the importance of SMEs for sustainable economic growth, job creation and economic/social cohesion. By Zambian standards, most of the companies that contribute the…

  14. contd…largest to the sustainace of our economy fall under this category so if you think you can attain the 12% GDP growth needed to even begin to see signs of poverty alleviation without empowering SMEs through easy access to capital financing…you might as well forget about our country ever emerging from the economic downturn we have been experiencing for the past three decades. Fact is…No country can ever develop without the majority of its economic activity being driven by SMEs and these are the last hope all LDCs.

  15. Point #14, but SMEs’ economies differ from country to country or regions as the case maybe. Yes, they employ that vast amount of pipo, and they directly have an impact on the economies of the households of their employees. These debt facilities can be managed by both the lendor and the ‘lendee’. Lets scrap the bottlenecks our pipo get thru when applying for finances, and put strigent monitoring mechanisms for those that acquire these debts. We can make a turnaround here and enjoy the fruits together.

  16. #14 being one of the people who criticised the idea initially due in part to lack of knowledge, I think we agree that some of us like me might not have the full knowledge. Let me tell you the cultural dimension to this. In Zambia when tell someone I have a micro-finance loan, the immediate thing that comes to mind is this guy runs a business by the road side selling Tomatoes, when you say I have a Small Business Enterprise (SBE) what comes to mind is a small shop with not more that US$5,000 worth of goods. Now if we are not careful with the language we use especially when we say SMALL, we have to be very careful the message we are sending to the enterprising young men and women out there…

  17. #16, you are right, the important thing any economy that wants to grow needs to do is remove bottlenecks and the bureucrasy that make it difficult for entrpreneuers to access manageble financing. Through all this, we need to realise that we cannot depend on foreign Multinational companies whose ulterial motives behind their investments leave us worse off. Also, Entrepreneuers need to be disciplined in the way they manage borrowed money, the high risk faced by financial institutions when they lend money to entreprenuers is the main reason borrowing is so difficult in our country and you cannot blame the banks entirely, part of the problem is with the borrowers.

  18. The role of small businesses is crucial. In many economies they contribute significantly to job creation, and export of goods and services. Their importance has precipitated a growing interest by academics, researchers and policy makers to find ways to create resilient, viable and sustainable ventures. High performance of SMEs is critical to achieving this objective. That is, high performance in terms of human resources, supply chain management, technology and innovation, environmental management and a range of other factors.

  19. … that they should be comfortable with 50,000 kwacha investments because they are small management enterprises. 50 million euro compared to 50 thousand kwacha (10 euro) is an insult. Actually going by your definition, every company except maibe the mines is an SME, Celtel, MTN are all SMEs if we are to live with this definition. The banking sector, that is a major problem, I know of a TAXI driver in RSA who is servicing a mortgage, if these banks cannot take risks like that then who will, me with my 100,000 kwacha salary should take a risk on behalf of barclays bank? Anyhow thanks #14 for the data, I have learnt something new, so my day has not been wasted.

  20. Usually I try to refrain from commenting on economic issues from home because I have been away for about four years and I know things haven’t been the same since and all I know is according to what I read in the press. That said, it is a fact like #20 said that all compnies in Zambia are SMEs including the mines who are daughter companies of some MNEs but are run as independent subsidiaries, so it is true that ou economy is infact driven bt SMEs. But my interest in this dicussion is in the “Small enterprises” (put aside the medium for a minute) because they are the ones that would be in local hands entirely and would a true represantive of entreprenuer empowerment as route to meaningful…

  21. contd…sustainable economic growth. The financial lenders are in the business of profit making just as is any small entreprenuer, so as the banks take risks, borrowers also ought to realise that part of building sustainable growth in any business is have a good rapport with your equity sources, so in Zambia, the problem in my view is on both sides. If you look at Nordic countries for example where the majority of the people are trustworthy and law abiding by nature, even the business environment has been built on that premise of trust such that anyone can walk into a bank at any time and walk with a loan within minutes.

  22. Valid points #21-22. Over the years we have erodede the trust of the source of our equity and we are paying that heavy price for us and for many generations to come unless something drastic is done about our conduct in the business sense. Many yrs back entreprenuers would borrow from only to spend half of it on luxury such as cars etc. Those comes with growth, not like teeth with age. There are many lessons to be learnt, and the hard way at that.
    Hey, where are the proffessors today?

  23. #23, the self proffessed proffesors only discuss name calling political issues, they can’t discuss issues of substance like the one we have here. By the way, does anyone know what hapend to Ms Mwanakatwe? the former Barclays MD. Was she fired or where is she now? just curious…

    On the other hand, Iam writting a paper on the business case for Corporate Social Responsibility in Zambia so if any of your guys has ideas worht listening to, they are most welcome…Iam actually planing on going to Zambia on a research trip so if you are interested in CSR issues from any perspective, I would like to hear from you…

  24. 23 & 24, first and foremost do not worry about being away from Zambia for a long time, we have not moved pretty much. Margaret was last in Ghana atleast as of last year, I am not sure whether she is still there. Trust, i think that is the bigger issue surrounding extending credit to business people in the country. Some discussion I had this morning with a guy from IFAD says, credit culture in africa is bad through and through as a matter fact he thinks the word loan and gift and synonymous. Well to some extent I agree at the same time I chose to disagree with him, that the problem we have in Africa is actually a bit of cultural, there are things which the western world (world bank) have…

  25. #16, you are right, the important thing any economy that wants to grow needs to do is remove bottlenecks and the bureucrasy that make it difficult for entrpreneuers to access manageble financing. Through all this, we need to realise that we cannot depend on foreign Multinational companies whose ulterial motives behind their investments leave us worse off. Also, Entrepreneuers need to be disciplined in the way they manage borrowed money, the high risk faced by financial institutions when they lend money to entreprenuers is the main reason borrowing is so difficult in our country and you cannot blame the banks entirely, part of the problem is with the borrowers

  26. ..prescribed solutions for Africa and some of them unfortunately have been blessed by our Governments. I was reading a document not a long time ago and then guess what one of the reasons someone was giving for lack of agriculture progress was that in the 90’s there was donor aid freeze, my foot. I felt like tearing it, there has been no time in this country when we have received so much AID than the first 3 years of Chiluba’s government. What happened was the Government chose to throw the bath water with the baby, they withdrew from the Agriculture sector instead of allowing a transtion, And they withdrew to leave it to private sector that did not exist, so how does one explain the decline..

  27. … as that of lack of donor aid. So we shall continue the discussion, and for the record I am one of those people that are very interested in CSR because in this country it looks like corporations exist in a vacuum to the exclusion of the societies around. if you require a side discussion, you can send the paper to [email protected], I will be happy to provide comments.

  28. #26 very true this problem is both sided and unfortunately we do not have deliberate policies by even the banks themselves to, as part of the corporate social responsbility (CSR), to educate the entrepreneurs regarding the value of paying off their debts in time. Because we cannot leave this to the Government alone.

  29. #28, thanks my brother for your insightful comments on how everybody wants to find somebody else to blame when they fail to deliver. The Chiluba regime messed up our economy because when they came in, they did everything without serious planning. To some extent I even applaud Mwanawasa for the efforts he has made given that most of his ministers and MPs are incompetent to help him deliver. On the CSR issue, thanks for showing interest, I will write you soon privately so we can have a discussion on how we can help each other for the future.

  30. # 9 AFRICAN POLITICS, Do you know what SME’s are? From your posting, I do not think so. SME are the backbone of economies in the USA and other Developed Countries. They are the largest employers, a situation that has been lacking in Zambia.

  31. Magaret Mwanakatwe ill-advised them!I don’t what she feels about the way BBZ has opened up branches in Zed now!shame on you…….

  32. Today’s SMEs are 2moro’s multinationals. Dell Inc., etc. started that way. Therefore the problem is not the SMEs perse but people’s perceptions and trustworthiness. This is where we have scored low in Zambia and that is where the biggest change management needs to take place.

    As for Ms. Mwanakatwe, I think she was just a figure-head, she was not calling the shots, her principals in London via RSA were! Die hard capitalists are not charity givers, hence their decision to walk away from rural areas bcoz profits ceased!

  33. #31 Magogofacts No I didnt, sorry for being ignorant. It was only until I read most of myself’s posting. thanks to Mwiinga’s questions,I have learned something too

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