Untapped Market

How has your client portfolio developed in line with shifts in Zambia’s macroeconomic landscape?

Despite 2016’s recession, JMAAC managed to grow by 20%. This can be attributed to the targeting of a new sector of the business community: the marketeer. Typically, classified as an integral part of the informal sector, market traders presented a great opportunity for JMAAC. Countrywide, there are 4 million people who make up this demographic. We launched a product that focuses on empowering marketeers and with this managed to penetrate the segment. To start, we conducted a study on the informal sector and realized that existing business models did not cater to the needs of these individuals. We launched products mostly in Lusaka, since this has the largest concentration of market traders and it is also easy for us to monitor from our head office. Thus far, we have been doing well, with minimal defaults. Sometimes repayments are slow, though they always come in.

How did you reach out to this populace?

These marketeers belong to both associations and municipality councils where they are able to acquire tenant agreements and operating licenses. To reach out to marketeers, therefore, we went through the Lusaka City Council and the biggest local market in Lusaka, Soweto market, before partnering with the Zambia Marketeers Association, signing a MoU that was beneficial to both parties. We began sharing our data, helping the organization to grow its database in terms of registered members. In total, we set aside ZMK5 million for microfinance lending to marketeers in 2016, part of the first phase of this project. The next step is to roll out this product to other provinces. We did not want to do so before testing the product in Lusaka to iron out any teething problems during the pilot. In fact, we made certain miscalculations the first time around, though we have rectified them, and we now have a better product that secures us and benefits the marketeer. Our first destination will be the North-Western Province, which is where the majority of Zambia’s mines are concentrated and makes economic sense. In June 2017, we plan to drop down into the Copper Belt.

Are you optimistic regarding macroeconomic factors and the measures being taken to reduce interest rates?

We should see some improvement soon. The government has shown a more active stance, determined to fulfill its commitments and generate change, so we remain optimistic. However, the other factors that negatively influence these businesses are high levels of imports; few items are manufactured locally. An import ban would be a great suggestion; however, before we introduce a carpet ban, we need to carefully assess what our current capacity is. A country can only ban imports if it produces locally, so first the government must encourage local production with economic zones and other incentives. Then, it can ban imports, or at least increase taxes on imports.

What strategy do you have in place to grow your portfolio over the next five years?

2016 was a relatively slow year. While things are picking up, our studies show that for SMEs, obstacles remain in their paths to sustainable growth. Because we understand that the key is ICT, we target ICT companies and suggest collaborations in order to increase accessibility to finance. For example, we work to develop certain applications that will benefit marketeers, SMEs, and civil servants. In response to the government’s request for more efficient tollgate fee collection and administration, we are developing an online product for this purpose. Eventually, users will be able to purchase a card from us and use it to pay for tolls. Once we turn away from the old-fashioned methods of traditional banking, small players and big players both stand to benefit from the new innovative business environment. We all seek new ideas, and such innovations will have a long-term, long-lasting impact.