The Bank of Zambia (BoZ) has seized Zampost Microfinance Limited and Pan African Building Society effective Friday, July 19, 2019, after both financial institutions fell into insolvency.

According to a notice circulated by the central bank, the BoZ took full possession of both struggling financial institutions as they fell into insolvency, pursuant to Section 64 (2) (e) of the Banking and Financial Services Act (BFSA), No. 7 of 2017.

“Notice is, hereby, given that pursuant to Section 64(2)(e) of the BFSA, No. 7 of 2017, the Bank of Zambia has taken possession of Zampost Microfinance Limited and Pan African Building Society with effect from 19th day of July, 2019, on account of insolvency. The Bank of Zambia is empowered, under Section 64 of the BFSA, to take possession of a financial service provider where such a financial service provider fails to comply with this Act and any rule or regulatory statement issued in accordance with this Act or any other applicable law,” BoZ stated.

“The Bank of Zambia has determined that Zampost Microfinance Limited and Pan African Building Society are insolvent. Therefore, the Bank of Zambia has exercised its authority under the law to safeguard the interests of the public and provide for the orderly exit of the two institutions from the financial sector.”

The central bank added that a statement of affairs of the assets and liabilities would soon be prepared for both insolvent institutions ahead of any further action.

“Zampost Microfinance Limited and Pan African Building Society are now under the possession of the Bank of Zambia. During this period, the Bank of Zambia shall prepare statements of affairs of the assets and liabilities of the two institutions and take any other action it deems fit,” stated BoZ.

Zampost and Pan African Building Society become the second and third financial service providers to become insolvent in three years after Intermarket Banking Corporation Zambia Limited went under in 2016.

Intermarket, however, resurrected and resurfaced as the Zambia Industrial Commercial Bank (ZICB) after a successful re-structuring process and adequate capital requirements met.