In an apparent response to the need for a more convenient medium of exchange in Zambia's inflation-ravaged market, a Lusaka-based company is to launch the Cash Smart Card.
Mambo Banda is the architect of the scheme, which is the first of its kind in Zambia. He told AB that a substantial number of banks - the crucial guarantors - "believe it can work". Originally hatched in March 1993, the cash-card initiative has undergone vigorous scrutiny at home and abroad for the purpose of enlisting confidence and acceptance from key partners and prospective users. Banda, Chairman & Chief Executive of Access Information Systems, Online Computer Services and Realtime Computer Systems, confirms that the major hitch in the operation of a clearing house has been overcome. "The cash card is expected to be operational by August this year," Banda said in January. "We will soon register a company whose equity will come from reputable local investors to administer the whole system, inducting the central clearing facility." Although the Bank of Zambia (BoZ) has welcomed the idea, it has flatly refused to become the rearing house for the card's operation. But Banda suggests that the BoZ could be one of the participants on a Board of Directors that would run the clearing house. Invitations to serve on the Board are to go to the central bank, to the Zambia Association of Chambers of Commerce & Industry (ZACCI), to the Bankers' Association of Zambia (BAZ), to the Ministry of Finance and to the Ministry of Commerce, Trade & Industry. The reason for including the central bank, Banda explains, is that the BoZ has the official obligation to control the supply of money in circulation. Since cash cards have a direct effect on the flow of money, Banda argues, the BoZ will need to be aware of how much money is "sitting somewhere out of circulation". The BAZ is being counted on to define the security system to be used. Cash cards would, Banda points out, also improve revenue collection by making it possible for the government to intercept sales tax when payment is made at the banks. He also points out that the system can be useful in reducing inflation. "Cash velocity is a contributing factor to inflation," he observes. "The utilisation of a cash card will slow cash withdrawals, and banks will hold onto larger sums of money than is the case at the moment."
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