Zambia: UN agency combating rural poverty to develop up to 2,000 savings societies

Zambia: UN agency combating rural poverty to develop up to 2,000 savings societies

The United Nations agency working on eradicating rural poverty will help to establish 1,500 to 2,000 savings and credit institutions in Zambia, especially for families headed by women or badly affected by HIV/AIDS, by lending the Government nearly $14 million.

To flesh out the programme, which will cost a total of $17.4 million, the Zambian Government will undertake such improvements as swapping $1.3 million in debts owed by the Zambian National Savings and Credit Bank for equity and providing another $1.2 million in new cash resources, the UN International Fund for Agricultural Development (IFAD) said.

"This programme supports the Government's Financial Sector Development Plan by creating new community-based financial institutions, promoting rural banking services and testing innovative ways of providing financial services to rural producers," IFAD Vice-President Cyril Enweze said.

Non-governmental organizations (NGOs) and local microfinance institutions will provide the training and advisory services necessary to create between 1,500 and 2,000 accumulated savings and credit associations, enabling members to generate savings that can be lent to other members. Another 300 to 400 existing savings and credit groups will also receive support, along with special safeguards to make sure their activities are sustainable.

A credit facility will enable commercial banks to lend money to companies that contract small rural producers for small-scale production.

IFAD noted that it is supporting 192 rural poverty eradication programmes and projects worldwide, in which it has invested $2.8 billion of the total cost of $6.5 billion.