CHAMBO NGâ€™UNI, Kabwe
KABWE is witnessing unprecedented investment in the banking sector, a development that stakeholders are describing as positive in so far as stimulating economic growth in the central Zambia provincial capital is concerned.
The increasing number of banks is also said to be a prerequisite to consolidating and boosting investment credentials in the Central Province capital, thereby attracting more investments in other sectors.
First National BankÂ (FNB) has become the latest financial institution to establish its presence in Kabwe, an indication that the district is a viable investment destination.
Sydney Tembo, the president of Kabwe Chamber of Commerce and Industry is elated that the district is able to attract investments in the banking sector.
â€œThe banking sector only responds to progressive economic development in an area,â€ Mr Tembo notes. â€œKabwe is an area where investors will do well.â€
Kabwe, according to Mr Tembo, has an enabling investment environment that enables banks to operate profitably.
An increase in the number of banks in an area creates a favourable and competitive environment in the provision of quality and attractive products and services to clients.
â€œAt least every year, we have got one or two financial institutions coming into Kabwe,â€ Mulungushi University vice chancellor Hellicy Ngambi says. â€œI believe it is because they recognise its [Kabweâ€™s] potential.â€
Professor Ngambi says the presence of â€œbig banksâ€ in Kabwe is a sign of a fast- growing town in Zambia.
Banks have recognised this fact, she adds.
Investment in the banking sector in Kabwe dates back to the days of the World War I when National Bank of South Africa established a new branch in Northern Rhodesia on September 10, 1918.
One officer worked as a manager, accountant, cashier, ledger keeper and as teller in a small office. National Bank was later in 1925 incorporated into Barclays Bank.
Standard Bank also opened its branch on Freedom Way in 1928 and it operated until 1949 when the building was leased and subsequently purchased.
Standard Bank Zambia Limited and National and Grindlays Bank were also financial institutions that operated in Kabwe and immensely contributed to the economic growth of Kabwe.
National Commercial Bank Limited, which later transformed into Zambia National Commercial Bank, is also believed to have extended its operations to Kabwe in 1973.
This Zambian wholly-owned commercial bank handled much of the transactions of parastatal organisations.
Over the years, however, the picture of the banking sector has changed in the former Broken Hill town with Finance Bank (opening in 1995), Indo-Zambia Bank (1993), Zambia National Building Society and National Credit and Savings Bank (2002) being other financial institutions currently operating in Kabwe.
Stanbic Bank opened on November 23, 2011 and, in 2013 BancABC and Investrust Bank also followed while FNB had its presence established in Kabwe in 2014.
Undoubtedly, Barclays Bank is the longest investor in Kabwe albeit having ceased its operations in 2005.
The closure of the longest -serving bank was criticised by a cross section of residents.
This development meant that clients in Kabwe had to travel to Lusaka for their transactions.
Barclays Bank, however, returned in 2007 and it recognises Kabwe as an emerging social and economic hub that is making a significant contribution to the development of Zambia.
The bank established a prefabricated facility at Civic Centre as its new premises in Kabwe, amid opposition as stakeholders wanted the bank to resume operations at its old building located on Katebe Chiluya Street-Marshal Avenue.
The bank finally rehabilitated its building at a cost of over K4.5 million and it was opened for business in 2012 to cater for the growing customer base.
Stanbic Bank, on the other hand, invested in Kabwe for the first time under the belief that the town was set for economic and industrial rebirth.
â€œOur Kabwe branch opening is in part, a response to the potential of Central Province and in particular Kabwe which has recorded significant growth of the SMEs and the agricultural sector and stimulated economic activities in the entire province,â€ then Stanbic Bank managing director Dennis Kennedy said.
Mr Kennedy said Kabwe had the potential of being an economic giant if revived and capable of becoming a key centre of development in Zambia.
FNB senior manager-commercial banking Yokonia Ngoma says his bank seeks to provide better services to the community in Kabwe.
â€œIt [FNB] is undoubtedly one of the fastest growing banks in Zambia with 13 branches and,the latest two branches being Choma and more importantly Kabwe,â€ Mr Ngoma said recently.
Noah Kabwita, an investment advisor, however, contends that an increase in the number of banks in Kabwe does not necessarily mean the district is experiencing economic growth.
â€œThe banks that we have seen so far coming in Kabwe are not necessarily coming for business investment but they are coming for civil servants,â€ Mr Kabwita argues.
â€œBanks like lending money in personal loans to civil servants and they are able to recoup what they give.â€
If individuals who borrow money from banks use the finances on viable and productive activities, the services that banks are providing will be more meaningful, Mr Kabwita says.
He notes that civil servants mainly use the money they borrow from banks on consumptive activities such as buying second-hand vehicles.
This manner of spending, he says, does not have a positive impact on the economy.
But Prof Ngambi observes: â€œFinancial institutions do not take calculated risks and they know where the money is going to be in the future and Kabwe is the place to be.â€
Prof Ngambi, who is the first female chancellor at Mulungushi University, urges banks to invest in Kabwe because it has great potential.
She, however, challenges banks to have flexible products that are robust enough to facilitate the growth of Small and medium enterprises (SMEs).
Prof. Ngambi says banks should not only concentrate on their traditional role of keeping depositorsâ€™ money and producing it on demand but should also provide affordable finance to SMEs.
â€œYou need to come up with innovative financial products that meet the needs of the business community. You also need to cater for the emerging needs of the small and medium- sized businesses,â€ she says.
Patson Katongo, a banker, explains that the investment by banks is good for the economic well-being of Kabwe.
Mr Katongo says banks are attracted to Kabwe by mining- related investments (which have created jobs), growth of agriculture and the influx of SMEs.
â€œCreation of jobs is an indication that there is economic growth and there will be flow of money in the economy, and, banks would be interested to invest in such an area,â€ Mr Katongo says.
He also says operations of the mines and creation of jobs trigger multiplier effects in the economy, thus the demand for services and products of the banks.
CHAMBO NGâ€™UNI, Kabwe