In today’s posting we discuss the benefits delivered to the society by entrepreneurship in terms of reducing social inequity (imbalance) and creating awareness of new products. I discuss these benefits based on the Zimbabwean banking entrepreneurs. Enjoy and be motivated.
1. Social Inequity
Many indigenous bankers had reached their ceiling in terms of promotion and career opportunities. However entrepreneurial banks created a market opening for them to transcend this social inequity. It reframed the structure and composition of the financial services sector, allowing for meaningful expression of meritocracy and opportunity. Some entrepreneurial bankers, who may not have had an opportunity to rise past the glass ceiling, created banking structures that have since proven their skills and improved the national economy. Certain segments of society which had no access to banking products that were reserved for the elite were given a fair chance to access them. Many indigenous people had minimal collateral and hence failed to get loans from established multinational banks. However the entrepreneurial banks assessed not only the collateral but also the viability of the project and thereby created structures to fund the projects based on viability and other forms of security. This increased access to financial products, resulting in many people’s lives being improved.
3. Awareness of Financial Products
Before the appearance of entrepreneurial bankers, a significant majority of the indigenous people was uninformed of banking products. Most local people were allowed to open only low interest savings account. Very few had access to checking (current) accounts. As one banking client noted, until there were entrepreneurial banks there was a lot of information asymmetry as bankers were secretive with information. She claims that she was not aware of different kinds of banking accounts and their benefits. Kingdom Bank spearheaded a well received awareness campaign for Unit Trusts . It has consistently run a weekly televised program called “Making Money Make Sense” for years.
This programme has been hailed as the flagship of a public awareness campaign to demystify banking through explaining the different financial and investment instruments, and how to access them, in simple terms. Consequently a significant number of people started investing on the money market, thereby increasing their wealth. Until this time the traditional banks had kept money markets a secret and thus constrained the majority of people to being money savers and not investors. These entrepreneurial bankers created options and avenues for the average person to participate as an investor. It empowered society for wealth creation.
Entrepreneurial bankers were passionate about educating their fellow indigenous people on ways of creating wealth through financial instruments. After Kingdom Securities became synonymous with Unit Trusts, it proceeded to popularise investments on the stock exchange by non-professional investors. The newly wealthy entrepreneurs kept pushing the boundaries and creating awareness for their kith and kin to access the wealth-creating strategies that had hitherto been hidden from them. Consequently the last ten years have seen ordinary Zimbabweans being actively involved on both the money and stock markets.