This chapter highlights the topics covering the background of electronic banking in relation to rural areas, problem statement, objectives, justification of the study followed by limitation of the study and ends with the disposition of the study. 1.1.Background
Banking for the rural community is a topic that requires attention in Zambia today, simply because the rural dwellers find it difficult to access banking services. With reference to many initiatives bank related around the world, electronic banking has proved to be a cheaper as well as cost effective way of offering financial services to those in rural areas. With the fast paced technological advancements, banks in Zambia are slowly introducing more electronic channels that enhance the access to financial services. Currently in Zambia we have two main electronic channels bank related, these being; Mobile banking and Automatic Teller Machine (ATM) banking. Sadly, these electronic services have only been accessible to those along the line of rail, as this is the area that seems to have a larger concentration of development relative to the rest of the country. Delivery of financial services to rural areas has been dogged by many challenges. Technology offers the potential to dramatically decrease operational costs, improve the quality of financial information and makes banking for the rural community more profitable and less risky for mainstream financial institutions. The challenge is that developing a successful e-banking initiative for people in rural areas entails managing of a host of interrelated issues, technology, pricing, financial literacy, functionality, partnerships, delivery channels, POS distribution e.tc This dissertation considers the strides that banks have taken to overcome some of the challenges that have harbored the technological transitions to e-banking, which seems to better cater to those in rural areas of Zambia. This chapter seeks to define the problem, so as to give a clear indication of the direction of this academic paper on e-banking for the rural population. 1.2.RESEARCH TOPIC
A critical evaluation of the challenges of introducing electronic banking to rural areas of Zambia. A case study of Zambia National Commercial Bank Plc. 1.3.Purpose of the study
This study is an investigation into the reasons why banks are finding it difficult to introduce electronic banking to the rural areas of Zambia. This topic falls under the module Marketing of Financial services, which is part of the University’s curriculum for the Bachelor of Arts Degree in Banking and Finance. The study seeks to highlight the challenges related to the topic at hand, and possibly suggest some solutions to the problem.
1.4.Area of study
The topic at hand falls under the module marketing of financial services which is part of the Banking and Finance course. It falls under this module because it has a focus on finding ways of increasing the market for financial services. 1.5.Research objectives
1.5.1 General objective
To evaluate the challenges of introducing e-banking to rural areas of Zambia. The specific objectives of the research were as follows:
1.To investigate the key constraints in developing successful e-banking products for rural Zambia. 2.To understand how e-banking is currently being used in rural areas of Zambia. 3.To assess the key advantages and disadvantages to different approaches to electronic banking for the poor. 4.To assess what strategies have been adopted to encourage usage of the e-banking solution in a rural market. 5.To establish what level of infrastructure is necessary to support electronic banking. 6.To contribute relevant literature to the area of e-banking in Zambia.
1.6.Justification of the Study
Banking in Zambia has mainly been associated with those people who are...