By Emmanuel Mwangaila and Gregory Sikeba.
13 December 2025
There is a growing market for borrowers in Zambia.
According to the World Bank data, there were 47 borrowers per 1,000 adults.
Given that the adult population is 9 million, this roughly translates to
423,000 borrowers.
Currently, there are roughly 50-60 lending
institutions in the country including microfinance institutions and commercial
banks. Additionally, the consumer confidence of people remains high despite the
access being hard and the interest rates being high ( 27% as of May 2024)
because inflation and job security still strains most people and households.
This highlights the growing demand for lending
institutions.
Step
by step guide of getting a lending licence in Zambia.
The Money Lenders Act, CAP 398, regulates the business
of money lending in Zambia and seeks to protect the public from the
exploitative practices of shylocks. Any lending business is guided by the
aforementioned Act and not registering your business under the Act or not
following its regulations can lead to you being fined or imprisoned or both.
The Money Lenders Act under the Interpretation section
defines a "money-lender" as including every person whose business is
that of money-lending or
who advertises or announces himself or holds himself
out in any way as carrying on that business.
Here's a step by step of how you can register legally;
STEP
1. GETTING A CERTIFICATE FROM THE MAGISTRATES.
You'll need to submit a detailed application to the
magistrates court which will review you're suitable for licensing.
Further, you'll need to publish a notice in the
newspaper notifying the public about your business giving the opportunity for
concerns or suggestions from the public if necessary.
Lastly, at the first stage, you'll also need to notify
the police.
STEP
2. PUT TOGETHER ALL THE NECESSARY DOCUMENTS.
i. Personal and business Identification. For
individuals, it includes NRCs, IDs,
Passports and for Companies a Certificate
of Incorporation and details of board members ( Directors and Managers )
ii. Business registration and Financial statements.
For the business name, register it with PARCRA and prepare a financial position
showing all resources of your business.
iii. Certificate obtained from magistrates court in
step 1.
iv. Application form obtained from the Ministry of
Finance.
STEP
3. SUBMIT THE LICENSE APPLICATION TO MINISTRY OF FINANCE.
After completing step 2, you need to hand in your
completed application form to the Permanent Secretary, Ministry of Finance and
pay a licencing fee which varies from business to business. For example, small
businesses pay k3,000 and multinational companies pay k6,000 annually. After
reviewing your application and supporting documents, the Ministry of Finance
will issue your license if you meet all the requirements under the Lenders Act.
REASONS WHY YOU NEED A LENDING LICENSE.
1. Legality- Did you know that it is illegal to lend
money without a license? If you continue operating your business without a
license, you might be fined, imprisoned or both. For instance in the case of
Eva Chiboni v New Future Finance Company Limited, despite validation of
signatures formed during the obtaining of the loan (L’estrange v Graucoub) Eva
Chiboni the plaintiff was not aware that the business was not registered
therefore there was fraud or misrepresentation. Further, Neighbours City Estates
Limited v Mark Mushili (SCZ Appeal No. 47/2013) the supreme court held that a
money lender not registered not registered with the Money Lenders Act was to be
held illegal because of lack of licences. Unfortunately, the Zambian courts do
not take it lightly when such a case is presented. Protect your investment.
2. Access to Direct Debit and Credit (DDACCs) and
other Bank services- Banks are not allowed to have any working relationship
with an unlicensed money lender. This means you cannot set up DDACC nor
maintain an account with any bank in Zambia. DDACC is important in order for
you to auto collect your money from salaried government and private clients. A
license lightens your burden of
follow-ups and gives you more time to just look for more capital.
3. Collateral- As a licensed lender you are at liberty
to dispose of property pledged by the borrower. Which without a license would
be illegal and you will lose your money in case of default
4. Access to government payroll and epayslips. Getting
a money lending license opens doors for you to access the entire government
workforce should you have enough money to give.
5. Court Backing and support- Having a money lender’s
license gives you the audience of honorable judges and government at large. The
bailiffs and debt recoveries team are ready to work with you. The court is
always ready to step in to help you in any way to ensure your business is not
disrupted. Without a license the courts are only there to shut you down
immediately.
You'll further put trust and more open opportunities
for your business once you register.
Need help getting a lending licence, email Emmanuel
Mwangaila (emwangaila@gmail.com) or Gregory Sikeba ( admin@gmsikeba.com)
for your registration with PACRA or business counsel.