By HELEN ZULU –

THE Bank of Zambia (BoZ) says there is need to revitalise the financial sector in order to meet the challenges of accelerated and sustainable investments in key sectors of the economy.

BoZ director of inspection Ephraim Muselekwa said this could only be achieved where financial system was able to improve its allocative efficiencies by providing appropriately designed products and services to all segments of the population.

Mr Muselekwa said BoZ recognised that the limited access to financial services and the low number of products available to different sectors of the economy had hindered the development potential of Zambia’s economy.

He was speaking at the official opening of the two day Islamic banking conference organized by the International Turnkey Solution (ITS) Egypt in Lusaka yesterday.

“There is need to revitalise the financial sector in order to meet the challenges of accelerated and sustainable investments in key sectors of the economy,” Mr Muselekwa said.

He said BoZ had been working on the development of an appropriate framework to operationalise and regulate Islamic banking in Zambia following a consultative process with all key stakeholders.

Mr Muselekwa said the framework had since been finalised and was expected to be issued to the financial sector before the end of the year.

He said BoZ believed that the introduction of Islamic banking would greatly promote financial diversity and inclusiveness.

“Since Islamic finance is relatively still a new phenomenon in most jurisdictions like Zambia, it is important that the principles underpinning it are well understood by financial service providers and stakeholders.