Question 1

What is FINCA Zambia?

Accepted Answer

FINCA Zambia is a licensed deposit-taking microfinance institution operating in Zambia. As part of the global FINCA Impact Finance network, it provides financial services to low-income entrepreneurs, small business owners, and underserved populations across the country.

With over 23 years of market presence and more than 200,000 customers served since inception, FINCA Zambia is a pioneer in financial inclusion. The institution operates under the regulation of the Bank of Zambia as a deposit-taking non-banking financial institution in accordance with the Banking and Financial Services Act, 2017.

Question 2

When was FINCA Zambia founded?

Accepted Answer

FINCA Zambia was founded in 2001 and opened its doors initially offering village bank loans in Lusaka. The institution was established as part of FINCA International's global expansion into Africa, following the organization's founding by John Hatch in 1984.

Over time, FINCA Zambia evolved from a village banking model to a full-service microfinance institution. The organization transformed into a licensed deposit-taking financial institution, expanding its product offerings and customer base significantly. This evolution reflects the institution's commitment to adapting to market needs while maintaining its core mission of financial inclusion.

Question 3

Where is FINCA Zambia headquartered?

Accepted Answer

FINCA Zambia is headquartered in Lusaka, the capital city of Zambia. The registered office and principal place of business is located at Plot 22768, Corner of Great East/Thabo Mbeki Road, Acacia Park, Arcades, Lusaka.

Question 4

Where does FINCA Zambia operate?

Accepted Answer

FINCA Zambia operates throughout Zambia with a comprehensive network of branches and agent locations. The institution maintains physical branches in major cities and provincial towns including Lusaka, Kabwe, Ndola, Kitwe, Chingola, Chipata, Monze, and Mazabuka.

Within Lusaka, FINCA Zambia has multiple branches serving various communities including Chawama, Chaisa, and Soweto. The institution extends its reach through a robust agent banking network called FINCA eXpress, with over 300 service locations across the country. This extensive distribution network enables FINCA Zambia to serve customers in both urban and rural areas, particularly focusing on underserved communities.

Question 5

What services does FINCA Zambia offer?

Accepted Answer

FINCA Zambia offers a range of microfinance products and services tailored to the needs of low-income entrepreneurs and small businesses:

Credit Facilities: Individual business loans, group loans (village banking), and customized loan products designed for micro and small enterprises. The institution specializes in providing accessible credit to customers who may not qualify for traditional bank financing.

Savings Products: Term deposits and savings accounts. As a deposit-taking institution, FINCA Zambia mobilizes savings from customers to promote financial resilience and wealth building.

Digital Financial Services: FINCA Zambia pioneered agent banking with biometric identification in Zambia. The institution offers mobile banking services and operates an extensive FINCA eXpress agent network using point-of-sale devices equipped with biometric technology. The digitized group savings platform called PAMO (Participatory Action Monitoring and Observation) empowers communities to save collectively.

Remittances and Transfers: In-country money transfer services and remittance acceptance, enabling customers to send and receive funds conveniently.

Question 6

What makes FINCA Zambia unique?

Accepted Answer

FINCA Zambia stands out as the first microfinance institution in Zambia to offer agent banking using biometric identification for secure, convenient transactions. This innovation has positioned the institution as a leader in digital financial inclusion.

The institution's approach to product development is customer-centric, tailoring offerings to meet the specific needs and aspirations of underserved populations. FINCA Zambia's focus on financial education empowers customers to build financial health and resilience.

With approximately 95% of transactions processed through digital channels (agent banking and mobile platforms), FINCA Zambia demonstrates exceptional efficiency in delivering branchless banking services. The institution's commitment to corporate social responsibility and its mission to end poverty distinguishes it as a socially-driven financial institution rather than solely profit-focused.

Question 7

What type of financial institution is FINCA Zambia?

Accepted Answer

FINCA Zambia is a Deposit-Taking Microfinance Institution (MFI), licensed and regulated by the Bank of Zambia under the Banking and Financial Services Act. This classification permits the institution to accept deposits and provide credit facilities, operating as a non-banking financial institution.

As a microfinance institution, FINCA Zambia specializes in serving low-income customers, micro-entrepreneurs, and small businesses who typically lack access to traditional banking services. The institution maintains lower capital requirements compared to commercial banks while adhering to prudential regulations including capital adequacy, liquidity, and reporting standards set by the central bank.

Question 8

Who owns FINCA Zambia?

Accepted Answer

FINCA Zambia is a subsidiary of FINCA Microfinance Coöperatief U.A., a Dutch holding company that holds 99% shareholding. FINCA International LLC, incorporated in Maryland, United States, holds the remaining 1% shareholding.

The parent organization, FINCA Microfinance Holding Company LLC (FMH), is a socially-responsible investment partnership that owns and operates microfinance institutions and banks worldwide. FMH's majority shareholder is FINCA International, Inc., a Washington, D.C.-based non-profit organization dedicated to ending poverty worldwide, while KfW (German Development Bank) holds a minority share.

Question 9

How does FINCA Zambia contribute to financial inclusion?

Accepted Answer

FINCA Zambia plays a critical role in expanding financial access to underserved populations throughout Zambia. The institution specifically targets low-income entrepreneurs, farmers, micro and small business owners, and individuals in rural and peri-urban areas who are often excluded from traditional banking systems.

By offering microloans without requiring traditional collateral and maintaining an extensive agent network, FINCA Zambia brings financial services closer to communities. The institution emphasizes serving women entrepreneurs and supporting customers to keep their children in school through improved household incomes. FINCA Zambia's village banking methodology and group lending models foster community solidarity while providing access to credit and savings opportunities.

Question 10

What is FINCA Zambia's financial performance?

Accepted Answer

FINCA Zambia has demonstrated financial stability and growth in recent years. For the fiscal year 2023, the institution reported total operating income of K90,273,083 (approximately $3.4 million USD), representing a 21.6% increase from K74,219,378 in 2022.

The institution achieved a profit before tax of K9,437,149 in 2023, compared to K8,690,257 in 2022, indicating improved profitability and operational efficiency. FINCA Zambia generated robust operating cash flow of K37,599,012 in 2023, demonstrating strong debt servicing capacity and financial sustainability.

The institution maintains low leverage with modest finance costs of K715,477 in 2023, reflecting conservative debt management. FINCA Zambia's audited financial statements are publicly available, demonstrating the institution's commitment to transparency and good governance.

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