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Zambia

Poverty is extremely deep and widespread in Zambia, despite the country's abundant natural resources. 61% of the population lives below the poverty line. Zambia's poverty rate is twice as high as Tanzania, and three times worse than Uganda, by comparison. Poverty affects over 80% of the people in rural areas, especially in regions that are poorly suited to farming. 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 today is a regulated, deposit-taking micro-finance organization, serving nearly 90,000 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 as a way to improve the quality and reach of its services.

Explore Zambia Data ↓

Financial Inclusion

Zambia:
Reaching the Financially Excluded

69% Adult population financially excluded The level of financial inclusion in Zambia is higher than in in Africa overall, but is still very low, at 31%.
12,338 65% Female borrowers % #
88,763 Total FINCA clients
0 0% Borrowers in rural areas % #
19,010 Total FINCA borrowers

Financial exclusion affects 2 out of every 3 adults in Zambia, making it difficult for most people to conduct business, to run a household and to build a future. With poverty so deep and widespread, 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. The financial services provided by FINCA Zambia are intended to help families implement these basic survival strategies.

FINCA Zambia's mission of financial inclusion stands out in two respects. First, it is the only subsidiary where savers outnumber borrowers by a 4 to 1 ratio. For many poor families, savings is a more relevant service than credit. The other is that FINCA Zambia has a higher percentage of female borrowers than any other subsidiary in the region. This outreach to women takes on added importance given the fact that so many men are working far from home.

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Living Standards

Zambia:
Quality of Life

9,315 49% Client homes without water % #
4,562 24% Client homes without electricity This is somewhat better than the rural conditions in neighboring countries, but not as good as DRC, whose clientele is primarily urban, like Zambia's. % #
13,877 73% Client homes without access to Internet % #
7,604 40% Clients who don’t own their home % #
8,212 43% Head of household with primary education or less % #

The living standards of our clients in Zambia are in line with a country with widespread poverty and poor 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% have only a primary education or less. And, as is common throughout the region, a high percentage (40%) do not own the home they occupy.

While these kinds of living standards are common in the region — especially in countries that have significant rural outreach, like Uganda, Tanzania and Malawi — Zambia is unique in that these quality-of-life issues are affecting a clientele that is almost entirely urban. (Though it is shifting towards rural areas.) Cities may offer more economic opportunity — and better access to electricity — but they do not guarantee a better quality of life, especially for those at the bottom of the ladder.

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Income & Employment

Zambia:
Income & Employment

$2,208 36% Average annual profit 36% of total sales. % #
1.57 Average # of employees per client enterprise
29,865 People employed in FINCA-funded enterprises
1,462 5% Employees hired due to FINCA loan % #
16,575 56% Wages paid above the poverty line The wages provided by FINCA clients in Zambia are lower than other subsidiaries in the region. % #
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FINCA’s clients in Zambia, on average, earn $2,208 each year to support their families. These borrowers employ about 42,489 people country-wide, or 1.6 per enterprise, including themselves. More than half of these employees are earning wages that are above the national poverty line.

As compared to most of the other countries we've studied, our clients in Zambia make comparatively less-intensive use of paid laborers, and they are less inclined to hire more workers in response to the FINCA loan. The main reasons for this muted employment effect will be found in the structure and dynamics of Zambia's small-scale economy, and may also relate to the fact that Zambia has a much higher incidence of poverty than its neighbors. In part, it also reflects the fact that a higher percentage of our Zambian customers are engaged in trading activities (including crops), which function mostly as forms of self-employment than enterprise per se.

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Women’s Empowerment

Zambia:
Empowering Women

12,338 65% Female borrowers % #
4,537 24% Clients with female-headed household % #
9,869 52% Households with female as main earner % #
11,596 61% Businesses run by women Almost two-third of the enterprises funded by FINCA in Zambia are headed by women (61%). % #
17,299 58% Women employed by enterprises Avg. #
14,036 47% Jobs created by women % #

FINCA Zambia has the highest outreach to women in the region. As seen by the rate of enterprise ownership, most of FINCA's female borrowers are running their own businesses, and they are usually 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.

In addition to the 14,500 female borrowers, an additional 20,000 women are employed in the businesses of FINCA's borrowers. These women make up about 60% of the 34,000 people working in our clients' enterprises. While the wages may be low, they are a critical lifeline for their families, since many of these women are the heads of poor households.

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Clients’ Goals

Zambia:
Attaining Business and Personal Goals

Goals Set By FINCA Borrowers
Goals Met By FINCA Borrowers
1,033 5% Start a business % #
9,751 51% Expand a business % #
913 5% Invest in education % #
5,212 27% Improve their home % #
1,849 10% Buy an asset % #
252 1% Pay down debts % #
18,789 99% Start a business Almost all borrowers expect that FINCA’s loan will enable them to achieve these goals. % #
16,084 85% Expand a business % #
19,010 100% Invest in education % #
18,835 99% Improve their home % #
18,516 97% Buy an asset % #
19,010 100% Pay down debts % #

Over half of borrowers (51%) in Zambia are interested in expanding their business; an additional 5% reported that their goal is to start a new business. The next-highest priority of Zambian’s clients is to improve their homes.

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. While we do not yet measure this indicator among non-borrowers, FINCA also aims for its savings services to help clients meet these aspirations. The regular accumulation of small interest-bearing deposits can eventually provide the resources for our customers to finance a small business or improve their homes.

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Special Topics

Zambia:
Poverty, Economic Sectors, Jobs and Profits

FINCA Loan Sectors

14,258 75% Trade % #
2,224 12% Services % #
1,464 8% Manufacturing % #
665 4% Crops % #
399 2% Livestock % #

Profit and Profit/Sales Ratio by Sector

$2,309 35% Trade Profit/sales ratio Avg. profit
1,976 38% Services Profit/sales ratio Avg. profit
$1,996 35% Manufacturing Profit/sales ratio Avg. profit
$1,658 46% Crops Profit/sales ratio Avg. profit

Jobs by Sector Due to FINCA Loan

974 67% Trade % #
212 Services % #
209 14% Manufacturing % #
57 4% Crops % #
10 1% Livestock % #

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