World Bank Group lead financial specialist Luz Maria Salamina has cited lack of financial literacy across the country as one major hindrance to sustainable economic growth.

In an interview, Salamina said Small and Medium Enterprises (SMEs) struggle to access funding because they lack knowledge on how to get loans, a situation she attributes to slow economic growth.

The Bank last month revised Zambia’s real GDP growth projection for 2018 downwards to 3.3 per cent, down from 4.3 per cent, triggered by dampened agricultural activity, among other factors.

“It is difficult to get a loan in Zambia. There are many more people that have less possibilities to get a loan in Zambia and this is because they don’t have information that they can share that will be useful that can be used to grant them loans. That is why we are engaging the media to help spread the message that SMEs can have the possibility to get a loan. That people that have higher risks should be able to get a loan. That is what we want to do. If people can have that possibility, then, of course, if you see many people have access to loans and then the portfolios grow in a healthy manner, and they can use that money to buy the things that otherwise they would have to wait all their savings time to get, then the quality of the life of people enhances,” said Salamina.

“And also, the small businesses would have greater opportunities to grow when the businesses of the small entrepreneurs grow, then the community also grows and also gets better because then they have more possibility for jobs. And when they have possibilities for jobs, then they have more access to credit, and if they have more access to credit, and if you multiply that, then hopefully, a massive improvement will impact positively in the economy. But for that to happen, there are many things [that] will have to be known to the people. People will have to be sensitized because this lack of information is hindering them. In order to really ensure that we reach that level, there is need to increase access to credit with lower interest rates; reduce information asymmetries; improve borrower discipline and support bank supervision and credit risk monitoring. That is the best way of improving your economy.”