Nearly half a century old, Zanaco is Zambia’s biggest financial services provider, with a mission to cater for all sectors of society. CEO Henk G Mulder explains how the bank is now revitalising its digital strategy to make itself even more inclusive and help promote an increasingly cashless society
You have experience of working in a diverse selection of markets, from the Netherlands, to India, Brazil, Indonesia, Colombia and Saudi Arabia. How would you describe Zambian financial services and what is happening with the digitisation of the sector?
In Zambia we have 19 commercial banks or so. Zambia is a very big country with a relatively small population, which means that to reach everyone in the countryside, we have a lot of branches – 68. We are present with a branch in almost all communities. But to further reach out, eight years ago Zanaco started its mobile banking platform, called Xapit. We haven’t invested enough in those platforms over the last few years, but new things are now being launched – in October we launched our smartphone app and the internet banking will be replaced in November. Before the end of the year the digital part of the bank will be largely replaced. In 2018 you will be able to open your account by tablet within only minutes. With this we can service our clients even better – the customer value proposals with the digital products that we offer is becoming THE bank in Zambia.
What else differentiates Zanaco from the other commercial banks out there?
We serve all segments. I don’t think we are the kind of bank that could say we don’t want to service, say, retired people because income is not high enough or whatever. We service everyone – that’s our responsibility. Our responsibility is also to help promote a cashless society, as the BoZ, the central bank, also does. Over time this will become a cashless society – there’s no doubt about it – but then you have to have the electronic means to do it. If we start promoting our app, we also make sure people have access to smartphones – because that’s something that is still a little bit behind, but moving forward quickly with the young generation. We will help to introduce it as well. We are not the kind of bank that introduces something and then only focuses on one or two segments in the market. Foreign banks normally go after private banking and preferred banking, and so on. We also do that, but it’s part of our suite of segments.
Is Zanaco a brand that Zambians trust? How would you define it?
At the end of 2019 it will have existed for 50 years. We are almost as old as the state of Zambia. Zambians have known Zanaco since they were children and they know it is a brand to be trusted – there’s a lot of emotion in the brand.
The way you are describing it, this sounds like a new chapter for Zanaco…
We call it Zanaco 3.0 and over time you will see more and more things being published and brought into the market relating to that. You will see that during 2018 the client experience will be changing as well. It’s the new Zanaco.
Do you play a role in educating people financially?
We have financial literacy programmes in different communities where we help people understand the basic stuff, such as what it means to have finances, debits and credits. You cannot do this enough.
You wanted to speak about agriculture…
There are two big sectors – agriculture and mining. We are in both. But agriculture has always been the main focus for this bank and is very important for the country. It’s not an easy sector to be in because you depend on world prices and sometimes influenced prices. One of the main issues is productivity – we are still below the productivity levels we would like to have. There is also too much focus on traditional products – maize, soya and wheat – so we need diversification in agriculture. Another thing we need, which is a normal development in all markets – including Europe, America, South America and China – is a further upscaling of the agriculture sector. I appreciate that there are smallholders, but I consider these more suitable for specialised products. I believe very much in upscaling in order to get productivity up – it’s good for everybody.
You are the number one bank in Zambia. What are some of the other sectors that you would like to be supporting?
Mining, definitely, but all sectors. There aren’t so many economic sectors in Zambia. I wish we could create more value out of the sectors, for instance, around mining. It’s not only copper – there is other mining in this country and maybe there are more opportunities as well. We should increase the value-added industries around it much more. But, of course, all kinds of elements play a role: whether you have the right workforce, whether you have enough people to work for you… But I’m sure there are more opportunities.
Could you describe your network a bit? You are putting in Zanaco express booths…
That’s agency banking. Alongside our 68 branches we have around 500 agents. These are shops where you can deposit and withdraw money with your ATM card. That’s being expanded a lot. The whole ecosystem that we are organising around our bank will expand throughout the country, through merchants and agents.
How would you describe the financial services sector in Zambia at the moment?
We have come from a period where we had very high interest rates and they have now come down, though they are still relatively high. There is a reluctance to lend in this market and that’s not good for the economy. On the other hand, if you lend with high interest rates, who can afford it? So we probably have to have more efficiency because the high interest rates also partly reflect inefficiencies in banking. If you create more efficiencies, you can also have lower interest rates. On top of that is the creation of a new credit guarantee scheme, which the Ministry of Finance is backing, to provide part guarantees to banks for SME financing. If that’s well run – professionally, independently – it could be very successful in getting back to a normal level of providing the right credits to the SME sector.
You were saying before that you were optimistic about Zambia’s growth. Could you comment on what is happening in Zambia now and where you see it in the next couple of years?
We forget it sometimes, but we have to realise that we are a nicely stable country politically and, in itself, we have a healthy economy. It maybe doesn’t have a lot of sectors, but it has nice growth – another five per cent is projected for 2018. It is a healthy figure. Whether it’s enough to create enough jobs for young people, I don’t know. But we have to look at that for the future. That’s why I’m stressing that we have to create more value-added industries in this country. If we can create that value-added industry sector around the mining sectors and agriculture, we can even grow more than five per cent. The good thing is that the power situation has improved tremendously compared to last year, so the cost for industry to produce has gone down. In 2016 it was very expensive to run your oil generators all the time. On top of that, besides hydropower, we still have a huge opportunity with solar energy. Sometimes we can say we lack this and we lack that in Zambia, but we don’t lack sunlight. There’s enough sunlight. Make use of it please!
Do you think the investment narrative telling the world about what can be found and done in Zambia is good enough, or has it been lacking?
More can be done and it can be done better. I would be very happy to help there. If you can add value, of course, and doing it with the government. Don’t forget that Zanaco is still 25 per cent owned by the government, and we are very close to the government.
The governor of the central bank was talking about programmes for empowering women within the financial world…
You start in your own bank, of course. You look at your management board to see if there are enough women in the organisation at the right levels. I would say Zanaco is quite healthy. On our management board we have four women out of the eight – so 50/50, the right balance. And it’s around that percentage in the management levels below. In the entrepreneurial world I also see women being active here in Zambia. Maybe in the countryside there are still things to improve, but we have very good organisations working on those programmes.
Is there anything you would say about British investment here?
We can speak English here, which helps a lot. Everybody at whatever level speaks very good English. It’s not the case in many other countries.
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