My main area of research interest in National Savings and Credit Bank (NATSAVE).

As an employee of
the institution, I want to not only know more about the perspective others have of the institution, but
the influence the bank has country wide. As such I have decided to look at the research topic; The role
of NATSAVE bank in providing financial assistance to rural development in Zambia

Background to the Study

Financial institutions such as bank serves as a marketplace for investors and borrowers. This is a place
wherein people who like to invest and save their money and people who want to borrow money for
business capital both interact. Banking institutions was popularized during the middle-ages when people
introduced the importance of keeping precious golds and metals in financial institutions rather in their
home. During the middle-ages, only established and developed countries had a financial institution that
facilitates the finance and wealth of the nation. A nation was considered to be rich when they have a
financial system in their country. This is because underdeveloped countries, during this time, used the
traditional way of exchanging goods from one another. Their primary role back then was to be a place
where rich people can keep their treasures such as gold and other precious metals. Nowadays, financial
institutions such as banks, lending firms, insurance companies and others have been playing a very
important role to the economic growth of a nation. They serve as a place where investors can invest
their money with the aim of accumulating a higher yield of interest. On the other hand, borrowers go to
the bank to look for a pool funds or capital for their businesses. Banks also facilitates and carry
monetary policies that are implemented by the central bank of one nation to influence the economy.

Poverty is a common feature of rural areas in Zambia. This has had an impact on their agricultural and
other livelihood operations during the course of the year. Inadequate financial capital to carry out their
livelihood activities is a major element that has contributed to rural area poverty. There is no denying
that finance is a cornerstone of rural economy development since there could be no smooth sailing of
economic operations without a constant flow of money and credit. This demonstrates that the
importance of banks and financial institutions in the development of any nation's economy cannot be
overstated. As a result of the vicious circle of poverty that has bedridden the economic activity of rural
areas in Zambia, the surplus of resources within the country dwells in rural areas and is most of the time
unexploited or underutilized. The Government of the Republic of Zambia realized that a lack of access
to financial services in rural areas greatly hampered the growth of Zambia's rural areas and population,
as well as the agricultural sector and overall economy (Mutati, 2012).
According to The World Bank Report (2021), as of the year 2020 55 percent (55%) of the Zambian
population lives in rural areas. One of the most significant barriers to rural development is a lack of
financial resources, which has a stronger impact on rural area productivity and overall well-being. The
role of the bank in rural regions is to increase production and promote a higher standard of living
through breaking the rural poverty cycle. Government has made numerous efforts over the years to
address the issue of agricultural financing and to improve the standard of living of rural households by
enhancing agricultural productivity. NATSAVE designed some banking products and services to offer
rural areas, especially those whose primary economic activity is agriculture, that will provide financial
assistance. A search indicated that no prior research has been conducted on finding out the role of
NATSAVE in providing financial assistance to rural development in Zambia.

Study Objectives

The overall goal of this research is to determine the extent to which the activities, products, and services
of NATSAVE affects rural development; and alternative means of enhancing rural operations to aid rural
development in Zambia. The study's specific objectives are to:

1. To determine how effective NATSAVE is in providing financial assistance to rural areas in Zambia.
2. Examine the challenges that NATSAVE is encountering in providing financial assistance in rural
areas.
3. To make recommendations for improving rural finance operations in the context of rural
development.
4. To examine economic theories (if any) supporting the notion that financial institutions, such as
banks, are responsible for economic growth.

Research Questions

The study will look at the following questions

1. What is the relationship between Financial Institutions and economic growth?

2. What role does NATSAVE play in the development of rural areas?
3. What obstacles is NATSAVE facing in their efforts to promote rural financial development?
References
Mutati, F. (2012). The rural finance policy. Lusaka: Ministry of Finance.

TheWorldBank. (2021). Rural population (% of total population) - Zambia. Retrieved from World Bank
Group: https://data.worldbank.org/indicator/SP.RUR.TOTL.ZS?locations=ZM