1. Presentation to the 2nd AFRACA Central Banks Forum 23rd -25th September 2008, Zambezi Sun Hotel, Livingstone, Zambia Michael Mbulo Programme Manager Rural Finance Programme

2. REPUBLIC OF ZAMBIAMINISTRY OF FINANCE AND NATIONAL PLANNING(MoFNP) RURAL FINANCE PROGRAMME(RFP) 2007 to 2013

3. Developmental Goal and Programme Objective Goal: To improve the livelihoods of rural households through increased use of sustainable financial services in rural areas

4. Programme Funding • Total Programme Budget = 17.5 million USD • IFAD Contribution = 13.8 million USD. • GRZ Contribution = 3.1 million USD. • FIs and Beneficiaries Contribution = 0.6 million USD. • IFAD Loan Approval Date 02/12/2004 • IFAD Loan Signature 09/09/2005 • IFAD Loan Effectiveness 07/09/2007

5. Programme Investment Components • Development of Community-based Financial Institutions (CBFIs) – (2.3 million USD) • Promotion of Rural Banking Services (support for NSCB) – (5.0 million USD) • Credit Facility for Contracted Small-Scale Production (4.6 USD) • Innovation and Outreach Facility (1.5 million USD) • Policy, Institutional and Management Support (3.5 Million USD)

6. Programme Outcomes • a) rural households using expanded and sustainable community-based financial services; • b) households, groups and enterprises in rural areas using banking services; • c) production by smallholders and other small-scale producers increased; • d) new financial products mainstreamed and additional services operating sustainably in rural areas; and • e) a more conducive policy & institutional framework for rural finance is in place.

7. Programme Area and Targeting • National in scope with a focus on areas of the country with comparative advantage for implementation of the individual components and activities • Developing financial services that reach poor households including female-headed and HIV/AIDS affected households

8. Development of Community-based Financial Institutions (CBFIs). Description • local NGOs and/or MFIs contracted as ‘promoters’ to support establishment and strengthening of ASCAs and FAs Target • 30, 000 rural women and men in new and strengthened community-based financial institutions Strategy • creation of new CBFI • strengthening existing savings and credit groups; and • thematic technical assistance

9. Promotion of Rural Banking Services (support for NSCB) Description • Assist government to develop NSCB to make its services available to the population of rural areas Target • 50 districts, • 100,000 to 120,000 rural households and small-scale entrepreneurs Strategy • Strengthening of NSCB Capital Structure • Expansion of Rural Outreach • Development of Rural Products • Development of Management and Operational Systems • Organizational and Manpower Development

10. Credit Facility for Contracted Small-Scale Production Description • Establish line of credit to facilitate commercial banks’ lending to contract out-grower/production companies Target • Over 60,000 smallholder farmers, contracted livestock owners, smallholder dairy producers, contracted honey collectors, contracted fishers, communities contracted to undertake tourism activities Strategy • Funds are revolved and used in the ongoing lending operations • Promote proactive encouragement and involvement of female-headed households

11. Innovation and Outreach Facility Description • Promotes the development and up-scaling of sustainable and appropriate rural finance operations reaching vulnerable households through incentives for financial institutions. Target • Rural households and small-scale entrepreneurs Strategy • Matching grant funds to support the implementation of proposed projects to participating institutions • Technical assistance to potential clients of the Facility • Enhancing inter-agency learning through dialogue

12. Policy, Institutional and Management Support Description • Develop a rural finance policy framework and associated legislation through financing for two sub-components: • (i) support for rural finance; and • (ii) programme management unit Target • Rural Finance Unit policy development at MFNP Strategy • Organizing a policy user response dialogue, • Strengthening the capacity of involved sector ministries and other government bodies, • Facilitating linkages with AFRACA and others • Running an Annual Rural Finance Forum

13. Programme Sustainability • Fitment with FSDP • Rural Finance Unit • Institutional Capacity Building • Revolving funds • Implementation through Local Partners