First Quantum Minerals (FQM) has expanded its community banking programme to support a wider cross-section of community entrepreneurs in the areas surrounding its operations.
The micro-finance model empowers local people in the villages and towns surrounding its Kansanshi mine in Solwezi and Sentinel Mine and Kalumbila, improving livelihoods and providing working capital for small businesses.
Introduced in the area in 2015 by Kansanshi Mine, the community banking model of micro-finance is a self-help revolution that encourages neighbourhoods to save money and lend each other cash for start-up capital or to expand existing businesses.
“In the first year, we saw a steady growth from 10 to 15 banks with a loan portfolio of slightly over K500,000. In the second year, we grew up to 33 banks. Now,we have 168 community banks. From membership of 350, we now have a total of 6,400 members. The banks currently have a combined loan portfolio of about K11.7 million,” said sustainability and livelihoods officer Golden Kontakonta.
The mining firm’s banking programme is inspiring communities to come together and develop their own responses to poverty. By selectively investing in home-grown economic ventures, communities have a sense of responsibility that encourages both discipline, management and pride in accomplishing goals – essential features of any sustainable enterprise.
The banks are in line with the United Nations Sustainability Goal (SDG) Number One, which aims to end poverty in all its forms everywhere – something FQM strives for through its economic impact as the country’s largest taxpayer and one of its largest employers. Its conservation farming and community banking projects also speak to that goal.
“However, there has been a paradigm shift from rural to urban areas, because we now have more of these banks in urban areas comprising employees and not local folk in the villages,” he said.
Mr Kontakonta explained that increasing access to financial services provides employment through start-up ventures and improves financial security for many people who cannot be absorbed into formal employment.
By aligning its community initiatives with the SDGs, the mining giant puts itself at the forefront of best practice in private sector social investment locally and globally.
“We have seen a number of people willing to join the community banks, including employees of parastatals and government institutions. We have established banks with civil servants, and started training community instructors in other districts. We also recently had young people from Mufumbwe come to learn how to establish a bank. We hope they will go and roll it out in Mufumbwe. We further plan to train youths from Kasempa and women from Mwinilunga so they can also start up a similar concept.
“We have realised the community bank concept is one of the more effective ways of alleviating poverty without running to lending institutions whose interest rates are higher,” he said.
Today, more than 2.5 billion people in the developing world are considered financially excluded, with no access to basic financial services such as bank or savings accounts or credit.
On the community banks’ side, half the profits are returned to investors and the rest are reinvested as loan capital.
Typically, a successful bank revaluates contribution rates after the first year and finds that most members, having seen healthy returns, are keen to invest more.
To secure funds not in circulation, First Quantum supplies a vault – a simple strongbox, triple-locked so that three key-holders must be present for any deposits or withdrawals.