Zambian Banks: adapt or die!
By Dickson Jere
Last week, banks and other financial institutions pulled out their quarterly financial statements for the year ended.
Their balance sheets showed interesting figures.
However, what caught most people’s eyes was the Bayport Financial Services one – showing a whopping profit margin that beats commercial banks in Zambia.
I am happy with those returns as Bayport is an indigenous run firm, by our very own Justin Chola, and deservedly hats off to him and the team.
Other micro financial institutions also posted some positive gains, literally competing with commercial banks.
What Bayport and other such players have done is to adapt to people’s needs while the commercial banks remain walloping in past business models.
People want to get loans pretty fast as the money is needed to sort out urgent things – funeral expenses, school fees, medical bills or taxes.
But when you go to the banks, you are subjected to lengthy process of documentation, explanations and account opening procedures that take weeks, sometimes, to complete.
Meanwhile, goods are stuck at the border and one needs urgent cash to pay.
That is where the micro finance institutions come in handy! Within minutes, you can complete the loan process and get the bucks albeit at exorbitant interest rates.
There are many other unlicensed institutions making a kill as they take advantage of the gap left by banks.
People are pledging their title deeds and cars every day to get fast loans from sharks. Names abound – kaloba, chilimba, gwagu and all!
Banks will need to change and adapt to new methods. Traditional way of doing things are long gone.
Look at how telecoms such as MTN, Airtel Money and others like Zoona and Shoprite have done to the money transfer business.
Literally wiping out the banks potential business in small transfers which involves mainly the unbanked population (ideally these people are supposed to have been captured by banks).
Huge transfers of money goes through this system instead of the traditional banking system.
Indeed, it is “Adapt or die” for the banking industry in Zambia.