As the only indigenous bank in the country, Investrust has a rich history in Zambia. How has the bank developed since its establishment?
The bank has now reached a level of maturity. Investrust Bank was established 20 years ago, initially as a merchant bank and then as a universal bank, under private ownership. Around 2007 Investrust Bank was listed on the Lusaka Stock Exchange. 2015 was the peak of our expansion in terms of the bank's footprint. Prior to that, we spent more than five years investing in the network. We are a medium-sized bank with 27 branches, three agencies, and 60 ATMs across Zambia, making our presence here highly competitive. Another key factor for the bank is that there has been significant investment in various platforms, to a point where our capability is similar to foreign-owned banks. We have invested particularly in alternative channels such as mobile and internet banking.
How do you seek to expand in the coming year?
Now that we have built up our network, it is a question of sweating these assets to get a return. During the years of investment, obviously, the returns are quite challenged, and now we hope to reap the benefits through profits. The other consideration is that bricks-and-mortar are not the only form of expansion. Investrust Bank is one of few banks that offer agency banking and this will be quite defining moving forward, as it speaks to the financial inclusion agenda. We have some of the large retailers as our agents in communities where the bank is not directly present. They can open accounts for customers through our mobile platform and our customers can make withdrawals and deposits. These are mostly supermarkets, because we are aware that that is where footfall is, as well as other vendors and cooperatives. We try to select agents with high levels of liquidity so there are no issues in terms of offering the services.
How has the middle market grown in the last two years?
Prior to 2016, the Zambian economy was growing close to 7% annually. There was a bit of a slowdown in 2015-2016, but the middle market has been growing in spite of this. This is especially true of the productive sectors. The other factor impacting the middle market is the emergence of SMEs that we have seen over the last 10 years. Those businesses contribute to a large extent the rise in activity we have witnessed, not just adding to economic activity, but also to employment. A third notable factor is a growth in entrepreneurship; we now see people in full employment who are also doing other activities or investments at the same time.
In what ways does Investrust, and Zambia's banking community as a whole, engage with the SME sector?
If there is any area of opportunity and growth in Zambia, it is still the SME sector. Fortunately for banks, the fact that the Central Bank increased our minimum capital requirement in 2012 meant that financial institutions had to find better ways to make returns. Historically, banks sought to avoid the SME sector because of the associated risks; however, these capital requirements have encouraged us to look twice at SMEs and how we can offer further support. The second important consideration is that the largest contribution to GDP in most African countries comes from SMEs. For us, in the financial services sector there is always the desire to go where the flows are; therefore, we are opening more and more to SME markets. The third important thing to bear in mind is that the Zambian economy is a trading economy. Most of these traders have sprung up in the SME sector. Finally, it is important to note that multilateral institutions now better support these economies. There is funding from Europe that is specific to SMEs, through lines of credit. Investrust Bank has accessed these funds for on-lending to SMEs in specific sectors.