By Ben Kangwa
Minister of Finance, Alexander Chikwanda recently launched the Bayport Financial Services’ Deposit Centre with a call to the organization to extend its deposit taking reach to other parts of the country so as to assist citizens, especially in the rural areas, to access finances cheaply. The launch took place on 27th April, 2016 at the Bayport Head Office in Lusaka.
Minister Chikwanda cutting the ribbon, looking on is Justin Chola, Bayport CEO
In his keynote address, he said Bayport should help provide affordable and accessible financial services to the Zambian citizens from all walks of life including the small scale enterprises. The launch of the deposit centre, he said, would assist increase the savings culture in Zambia.
“I would like to commend Bayport on this expansionary effort as it will make a significant contribution towards the national financial sector development plan. The commencement of the deposit taking will make a positive contribution to the savings culture in our country,” he said.
The Minister further called on Zambians to actively develop the economy by participating in the financial sector. He said Zambians should rise to the challenge to utilise business opportunities that exist through individual or joint ventures and help reduce the huge foreign exchange flight through wholly owned foreign companies.
He, however, strongly pointed out that foreign banks operating in Zambia have been externalizing a lot of money out of the country. He said having served as Chairman of the Audit Committee at a known bank years ago, he had knowledge of how much money goes out of the country in profits.
For this reason, he encouraged Zambians to set up businesses either as individuals or in partnerships with others in order to curb the scourge. “We need Zambians to participate either as individuals or in joint ventures and increase their stakes as this would significantly help to reduce the externalization of foreign exchange from Zambia,” he said.
On a slightly different note, the Minister also took advantage of the occasion to commend Bayport for providing tuition scholarships to over 50 students at the University of Zambia (UNZA) out of which 10 students have benefitted full sponsorship.
In 2014, Bayport Financial Services awarded full scholarships to 10 University of Zambia students to cover accommodation and monthly allowances. The company also awarded partial scholarships to 40 students who had been granted government bursaries but had not been able to meet other outstanding fee payments.
The speech was punctuated with applauds to Bayport Financial Services for its Corporate Social Responsibility packages that include donations to the cause of the Girl Child, material support to sports organizations such as Nkana Football Club.
Over the years, other donations have been soccer attire to Luanshya’s Roan United Football Club and football kit to Ndola’s Lime Hotspurs Football Club, cash and gear for the annual Choova Bicycle Race in Chipata and cash donation in support of the Heroes 7’s Rugby tournament held in Kabwe.
Added to the list is also the construction funding for the Zambia National Service hospital, comprehensive support funding for the Teachers’ Union at both national and local level and sponsorship of education costs of numerous orphans across Zambia.
Earlier, in his welcome remarks, Chief Executive Officer of Bayport Financial Services, Mr. Justin Chola gave an insight background of Bayport Shareholders. He said these include
· KINNEVIK of Sweden – A publicly listed investment fund with investments in over 80 countries and assets worth more than $10 billion dollars.
· The PUBLIC INVESTMENT CORPORATION of South Africa (PIC) – wholly owned by the South African government whose Minister of Finance is shareholder representative. The PIC is an investment vehicle with over $150 billion in assets under management.
· HELIOS INVESTMENT PARTNERS – An African focussed private equity firm with over $3 billion in capital commitments.
He stated that Bayport was formed in 2002 and that the above mentioned and other entities are shareholders in Bayport Financial Services via their ownership stake in Bayport Management Limited (BML), the international majority shareholder in Bayport Financial Services Limited.
Mr. Chola noted that from its roots in Zambia, Bayport Management Limited has grown to become an international organization with operations in 8 countries in Africa as well as in Latin America while its administrative office is in London.
He told his audience that Bayport employs over 340 Zambians, serves over 95,000 customers and has over 100,000 active loans and the net loan and advances as of March 16 stood at K1.5 billion, which constitutes a natural progress to offer deposit-taking products.
The Bayport Chief Executive Officer also appealed to the government and private organizations to put in place measures that would close the gap between deposit rates and lending rates which was quite significant. He explained that Zambia had gained a reputation where the gap between deposit rates and lending rates is wide such that the common man on the street was not reaping any benefits from financial institutions.
“We view this as an opportunity to close the gap and provide higher returns to ordinary Zambian citizens to whom we are committed,” he added.
He said in order to improve efficiency in the institution’s lending systems, Bayport had acquired state- of- the- art equipment. “We have invested heavily to build a completely customized solution from scratch in this new business.
On his part, Mr. Visscher Bbuku, Director-Non Bank Financial Institutions Supervision Department at the Bank of Zambia, in his remarks commended Bayport for the investment it has made to enhance financial outreach.
Bbuku said the transformation into a deposit-taking microfinance institution will enable Bayport offer savings products to its clients in addition to the loan products, as well as enlarge its resource base due to the build-up of deposits base. “This will undoubtedly position the institution towards becoming a major player in the financial sector in the years ahead,” he added.
He observed that there was a large un-banked population in Zambia, with a growing demand for banking and financial services currently at 59% from 37% in 2009. He noted that Bayport Financial Services Limited had contributed to the increase in financial inclusion by expanding access to finance by the middle income population, particularly the formal sector employees, who he said in the past “were not able to benefit from financial products.”
That said, it was time for the Bayport CEO to lead the Minister to the cutting of the ribbon right in front of the Deposit Centre entrance and the unveiling of the plaque on the side wall next to the entrance, marking a new chapter and a steady step towards a brighter future.
Traditional music and dance had been provided by ‘Nomakanjani’ Dance Troupe throughout the function and had interspaced all the three speeches that were delivered by the speakers.
Ben Kangwa is a Media Consultant based in Lusaka