Poverty is deep and widespread in Zambia, despite the country's abundant natural resources. Sixty-one percent of the population lives below the poverty line -- twice as many as nearby Tanzania. The poorest households are headed by women, since men commonly migrate in search of employment, or by people suffering from chronic illnesses, such as HIV, tuberculosis and malaria.
Founded in 2001, FINCA Zambia is a regulated, deposit-taking organization currently serving about 15,000 customers. FINCA started-off mainly in urban areas, but is actively expanding its rural outreach. Mobile and agency banking factor prominently in the organization's strategy to improve the quality and reach of its services.
Reaching the Financially Excluded
Financial exclusion affects two out of every three adults in Zambia, making it difficult for most people to conduct business, to run a household and to build a future. In the face of severe poverty, the income that a family can earn through a small business might be the difference between one or two full meals in a day, while small amounts of savings can keep a child in school. FINCA Zambia aims to help families implement these basic survival strategies by providing credit and other financial tools to grow their resources.
Quality of Life
The living standards of our clients in Zambia reflect widespread poverty and a lack of basic services. Half the households have no running water and a quarter are lacking electricity. The educational status of family breadwinners is exceedingly low: 43 percent have only a primary education or less. A high percentage do not own the home they occupy, which makes it difficult for them to access credit and to accumulate wealth over time.
Like Pakistan, which also has an urban-based clientele, FINCA Zambia shows that that the quality of life is not always better in urban areas than in the countryside. Cities may offer more diverse economic opportunities, but they do not guarantee a better standard of living, especially for those at the bottom of the ladder.
Income & Employment
Income & Employment
The average client enterprise in Zambia earns $2,208 each year in profits. Most of these micro-enterprises are engaged in trading activities, which make less-intensive use of paid laborers than other sectors, This reduces the job-creating impact of FINCA's loans relative to other countries where we work. Despite these factors, the majority of people working in FINCA-funded enterprises are earning wages above the national poverty line.
FINCA Zambia has the highest share of female business-owners in the region. Most of FINCA's female borrowers are the main source of income for their families. A quarter of them are single mothers, also the highest in the region. Woman-run enterprises are contributing a smaller share of the total jobs, however, because they are more likely to be engaged in activities such as trade, which are less prone to use hired workers.
Attaining Business and Personal Goals
While the majority of clients in Zambia are using their loans to expand or start a business (56 percent), they also have other priorities. Twenty-seven percent aspire to improve their homes, 10 percent are purchasing family assets, and another 5 percent are investing in education. While that may seem low, it is interesting to note that, among all the countries we've surveyed, Malawi and Zambia are the two places where this goal is most likely to be mentioned by our borrowers. The overwhelming majority of our borrowers in Zambia believe that the FINCA loan was (or will be) instrumental in helping them to achieve these goals.