GBA recently welcomed Zambia National Commercial Bank (Zanaco) as a member. Founded in 1969, Zanaco is a leading bank in Zambia, serving more than 1 million customers across the country in retail banking, corporate, government, SME and agricultural sectors.In this interview Mr. Henk Mulder, CEO and Managing Director, spoke with the Global Banking Alliance for Women about financial inclusion of women in Zambia, the bank’s decision to join the Alliance, its hopes for its Women’s Market program and the role the bank plays in supporting women.
Global Banking Alliance for Women: To help our global readership contextualize this conversation, can you share Zanaco’s market position in Zambia and how the bank has been differentiating itself in a crowded banking market that has a highly under-served and un-served population?
Henk Mulder: Zanaco is the oldest bank in Zambia, founded in 1969 – 5 years after Zambian independence. So the bank will be 50 years old next year. It was privatized in 2007, with Rabo Bank taking a 49 percent stake, and it has been further privatized since then.
In terms of market position, we cater to all segments and are spread throughout the country. We have 70 branches, 200 ATMs and 1,200 Express Agents – and we compete with all the foreign banks.
By the way, Zambians are the nicest people in the world, and I have worked in many, many countries!
GBA: As South Central Africa is a hub of innovation around digital financial services, can you share your vision for how digital solutions will transform both access to financial services and the added value of those financial services for the people of Zambia?
HM: We have a total focus on digital banking, with a vision that by the end of 2020 we will be the top transactional bank and the top digital bank in Zambia. We will be able to reach more and more people with our digital tools. We will be totally cardless within 12 months. Most banking will be done on a mobile phone platform, and we’ve invested in several digital products that make use of innovations like QR codes – using scanning to make instant payments phone to phone. This really is a game changer for the country, and it’s great for the small merchant.
As we have such a young population, uptake of digital channels is no problem.
GBA: What does your current focus on women look like?
HM: Let me start with the organization itself. We have a gender policy, with a 50/50 target for female staff. We are almost there, at 46 percent. Our managing board is 60 percent women. In this country, there is no big issue with women having positions of power. The vice president of the country is a woman, and the chair of our board is a woman. Many senior managers are women. We also have a lot of female entrepreneurs in our client base, especially as agents of the bank.
Our focus on gender at the bank is strong, and we are continuing to increase that focus – to understand the needs of our women staff and customers in a deeper way and to bring women together to network with each other more.
GBA: In what ways are you segmenting the Women’s Market?
HM: We are looking at female entrepreneurs in particular, but we are also looking into sub-segments on the consumer side. And it won’t just be about financial products, but also our approach to serving women clients and our non-financial services.
GBA: Looking at women business owners first, we know that in Sub-Saharan Africa there are many women entrepreneurs positioned in between traditional commercial banks’ lending to SMEs — which is highly collateralized — and microfinance providers whose upper limits on loans are relatively small based on the nature of their underwriting process, which can include character-based lending. How is Zanaco innovating to provide solutions to the very small enterprise segment, which women dominate?
HM: Many banks do require collateral, but I am not so interested in that. My interest is in the cash flow of the company – what is going in through your current account. Based on that, you can do financing and financial services more generally.
We have also started to make use of booths on the streets that are managed by agents who provide banking services. This allows us to reach women who don’t feel comfortable going into the banking halls.
We don’t discriminate between men and women on the financing side, but we have found that women are better repayers. We are planning to focus more and more on women on the marketing side, though. The perception is that banks are still “male” entities. This is not actually the case, so we have to change that perception.
GBA: Do you provide financial education?
HM: Last year we started to do financial literacy seminars tailored to a variety of segments. So for instance, for salaried people we have seminars on over-indebtedness, and for business owners we do seminars on leverage and the cost of borrowing. These are half-day seminars, and a lot of women are coming. We also plan to have e-learning as part of that.
GBA: Are these programs open to non-customers as well as customers?
HM: Yes, both. We believe this is a benefit that the bank can provide that is also a service to the country.
GBA: Given that the majority of Zambian households are involved in agriculture, and knowing that African women do the bulk of the farm work, what is Zanaco doing to support women in the agricultural sector?
HM: We have a well-spread-out network of 70 branches, and a lot are in agricultural areas. We also have 1,200 agents based in small shops throughout the country. So accessibility to our banking services is very good. The financing we do is not necessarily to small holders but more to the co-operatives, with good checks and balances. On top of that, we are very much part of programs that the government has – certain subsidies for small holders – and we are involved in getting the money into the right hands. We load it onto Visa cards, and they are only able to spend it on inputs into the farm.
GBA: 2017 data from the Global Findex shows just 45.9 percent of Zambians have a bank account, and 40.3 percent of female Zambians have a bank account. This is a very low number.
HM: I would like to know a bit more about how they collect that data because my instinct says it is higher. But we are in the process of building a modern economy, and there is an underlying demand constraint.
A problem with the development, for instance, of the agricultural sector, is that whether we like it or not, farms have to go to scale, and farmers will be displaced – just as they have been in Europe and many developed countries. We have to find jobs for them. There also need to be more value-added industries.
GBA: So it is as much an economic challenge as an operational challenge?
HM: Yes. If we do it in the right way, a commercial way, it can work. And the culture is becoming more entrepreneurial.
GBA: For women, other than small business owners and producers, what do you/will you offer?
HM: Our next step is to offer a micro-lending program through the phone that’s based on cash flows, this time including salaries, etc. But what I don’t want are the high interest rates – I don’t believe in that. I’ve seen it in India and Indonesia, and I am totally against it. But by the end of the year we should be ready to offer that on a very competitive basis.
GBA: Alongside your external proposition for the Women’s Market, do you have an internal diversity and inclusion strategy? What have you doneon that front?
HM: Our CFO is currently a woman. The position was held by a man before, but she got the job because she was the best candidate. When I hired a new COO, I hired a woman, and our head of human resources is a woman. Below that senior level, I would say we don’t yet have enough women in middle management. But if you ask me how we did it, I would say there is no secret: I think it’s Zambia. There is gender equality under the law here, and we have a highly educated pool of women to draw from.
GBA: How did you first hear about the GBA?
HM: I learned about GBA through our Central Bank – through [Deputy Governor] Dr. Tukiya Kankasa-Mabula. She comes after me all the time to do more to support women!
