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Finance
HOUSING FINANCE INSTITUTIONS
These traditionally provide banking and mortgage
lending services, and they generally take two major
forms: building societies and employer-sponsored
housing loan schemes. The Building Societies
Act of 2005 governs such building societies. The
country’s three building societies are the following
deposit-taking institutions: the Finance Building
Society, the Pan African Building Society, and the
Zambia National Building Society (ZNBS).
Pension funds
There are several types of pensions available in
Zambia. There are personal pensions, group occu-
pational pensions, and public pensions. Unlike the
National Pension Scheme, which is compulsory and
is designed to provide social security in the form of
a basic pension, occupational group pensions are
supplementary schemes sponsored by private sec-
tor employers and employees.
The National Pension Scheme Authority (NAPSA)
runs the National Pension Scheme. Other major
pension funds are the Public Sector Pension Fund
(PSPF) and Local Authorities Superannuation Fund
(LASF). The Association of Pension Fund Manag-
ers (APFM) represents the combined interests of
these pension funds as well as some smaller ones.
The cumulative number of NAPSA members regis-
tered since its inception in 2000 is slightly above
900,000, with about 600,000 active members and a
further 18,000 employers registered.
STOCK EX
CHANGE
Established in 1993, The Lusaka Stock Exchange
(LuSE) has played a key role in fostering the coun-
try’s economic transformation. The formation of the
LuSE was part of the Zambian government’s eco-
nomic reform program to develop the financial and
capital markets in order to support and enhance pri-
vate sector initiatives.
The LuSE is made up of corporate stock broking
members and is incorporated as a non-profit limited
company. Currently there are 10 member brokers.
Companies listed on the exchange include compa-
nies from all sectors of the economy.
LuSE has also launched a second Tier Market
called the Alternative Market for medium to small
companies wishing to list on LuSE but do not meet
the strict track record requirements of the Main
Market.
The exchange has been set up as a modern stock
exchange based on the most current international
standards and practices. These include the use of
a central depository system, trade for trade clearing
and settlement processes, a T+3 rolling settlement,
and adherence to G30 recommendations for clear-
ing and settlement system design and operations.
The Lusaka Stock Exchange’s automated trading
system went live in November 2008 and has since
been relatively well received.
The LuSE has a unified market, of both bonds and
equities. From its inception the exchange offered
trading in equity securities, and in March 1998, it
became the official market for trading in government
bonds.
Inv
estment incentiv
es from the Stock
Exchang
e
Several measures have been put in place to ensure
investor confidence and protection within the LuSE.
The market is regulated by the 1993 Securities Act
and enforced by the Securities and Exchange Com-
mission. The act is specifically designed to ensure
adequate investor protection and supports the op-
eration of a free, orderly, fair, secure, and properly
informed securities market. There is also a com-
pensation fund established under the act, designed
to compensate persons who suffer pecuniary loss
occasioned by the default of a licensed dealer or li-
censed investment advisor.
INSURANCE SECTOR
The insurance sector consists of insurers, re-insur-
ers, brokers, assessors, adjustors and policyholders.
In 1970 the Government of Zambia formed the mo-
nopoly Zambia State Insurance Corporation (ZSIC)
in order to provide low cost insurance to indigenous
Zambians. This state of affairs existed until the liber-
alization of the industry in 1992.
The Insurance Act of 1997 is the principal piece of
legislation governing the supervision and regulation
of the insurance industry. As an insurance supervi-
sor, the Pensions and Insurance Authority (PIA) is
tasked with maintaining an efficient, fair, safe, and
stable insurance market for the benefit and protec-
tion of policyholders.
