The Securities and Exchange Commision (SEC) Executive Director Philip Chitalu has disclosed that the commission is working on crowdfunding initiatives that will enable Small and Medium size Enterprises – SMEs and local enterprises to be funded.
Chitalu explained that crowdfunding can be facilitated through online platforms that list businesses that need funding and then these entities get funded by the crowd. “So basically a company or business venture gets funding from strangers, and SECs role is to provide a regulatory framework that would help or facilitate on providing a guarantee that the fundraisers pays back these strangers (the crowd) their money.
Speaking during the launch of the financial literacy week #financialLiteracyWeek2021 that runs from 22 to 28 March 2021 attended by the Zambian Business Times – ZBT, Chitalu explained that “We have launched what is called a sand box where we are going to look at case by case opportunities of innovative ways of raising funds from the public and channeling the same funds to the SMEs that need funding”.
The SEC Director further stated that “Remember our youths and children who are completing school require jobs and can only finds jobs if we make sure that SMEs in Zambia thrive and are funded so that they can grow into [large] companies,” he said.
And BOZ deputy governor operations, Dr Francis Chipimo said the central bank was working on this and are continuing with the outreach programmes and finding innovative ways of funding the SMEs.
Chipimo said BoZ is currently pushing financial service providers to develop products that are suited for people who do not have a lot of money to save. “When we look at the Finscope Survey for 2020, it reveals that uptake for financial products is still low, so we still have a lot of work to do to ensure that we increase the uptake.
“I would also like to mention that it is never to early or too late to start saving and any saving is not too small, you can start from any amount,” Chipimo said. The Bank of Zambia (BOZ) has said there is still a lot that needs to be done to ensure increased uptake of financial products through financial education. The theme of this year of the #FinancialLiteracyWeek2021 is “Take Care of your Health, Take Care of your money”.
