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The Private Sector Development Association (PSDA) has called for the urgent overhaul of the Money Lenders Act to safeguard the interests of both borrowers and lenders.
This followed revelations in the Auditor-General’s Report on the Accounts of the Republic for the financial year ending December 31, 2023, which highlighted challenges in implementing key provisions of the Act, resulting in potential revenue losses exceeding K1 million.
The Public Accounts Committee (PAC) had since urged the Ministry of Finance and National Planning to expedite the revision of the Act and provide a clear roadmap for when the Bill will be tabled before Parliament.
PSDA Chairperson, Yusuf Dodia, in a telephone interview with Zambia Monitor on Sunday, underscored the importance of a functional regulatory framework for money lenders, noting that small and micro-enterprises heavily rely on informal lending due to limited access to traditional financing.
“Many Zambian industries struggle to access credit from formal institutions. When the Money Lenders Act fails to provide effective oversight and protection, it undermines the entire ecosystem supporting micro and small businesses,” said Dodia.
He proposed that, in the interim, the government could consider issuing a Statutory Instrument to address urgent regulatory gaps before finalising a full legislative amendment.
According to the Auditor-General’s report, implementation hurdles stem largely from structural inefficiencies.
While licenses for money lenders are issued by the Permanent Secretary in Lusaka, the certificates required to operate are granted by subordinate courts in individual districts, as per Section 4 of the Act.
Section 3 of the same Act further mandates that lenders obtain a licence from the Ministry of Finance and National Planning, creating a fragmented and burdensome process.
The Controlling Officer acknowledged these challenges during a PAC hearing and informed the Committee that a task force had been formed within the ministry to follow up with money lenders and ensure that outstanding fees were collected and remitted to Control 99 by November 30, 2024.
PAC noted that proposed updates in the draft Money Lenders and Pawn Brokers Bill include the delegation of licensing responsibilities to the Bank of Zambia—an initiative aimed at improving compliance and revenue collection.
“The Committee strongly urges the Controlling Officer to expedite the revision of the Money Lenders Act and provide a roadmap on when the Bill will be brought to the National Assembly,” PAC stated in its submission.
“The Committee further urges the Controlling Officer to ensure that all supporting documents are availed to the Office of the Auditor General for verification, and resolves to await a progress report on the matter,” it added.
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