Banking in Zambia

Many transactions occur with cash only here in Zambia.  You get the best exchange rates with credit cards (even better than at exchange bureaus) but only high-end places that ex-pats frequent take them, and even then sometimes their credit card machines don’t work. Also, I’ve often been surprised at the number of top-flight restaurants that only take cash (and have had to bum money off of others because of it!).  However, I do buy all of my groceries with a credit card.  (The grocery stores that I know take credit cards are Shoprite, Spar, and Pick & Pay.  Most shops in Arcades and Manda Hill shopping centers take credit cards too.)

There are lots of choices for banks here.  We chose Barclays because it is based in Europe and they have branches worldwide, including the United States.  Here’s our branch in the Longacres region of Lusaka.  (BTW, notice how narrow the lane is between the parked cars; parking is an art here.)

To open a bank account you need “a letter of introduction” from someone who can vouch that you are a good person who will use money in a moral manner (my interpretation anyways, we never could get a clear answer as to why we needed a letter of introduction other than the manager vaguely saying some people “mis-use the bank,” which I read as meaning using the bank for arms deals, drug runs or to launder money.)  After we hemmed and hawed for ten minutes upon hearing this the manager finally said, oh, I’ll just be your reference and complete the letter of introduction.  To avoid any delays in opening a bank account, you might get someone from your work to complete the letter of introduction form and bring that with you when you open an account.

You can open a kwatcha (local currency) account or a U.S. dollar account. We decided to open a kwatcha only account so we could withdraw local currency whenever we needed it.  (Some people prefer a U.S. dollar account because they can withdraw dollars and then go to a change bureau and get a MUCH better exchange rate.  The exchange rate we got converting wired-in dollars to kwatcha was 4620 kwatcha to $1.  At the bureaus the rates are more like 4760 kwatcha to $1.  However, when we factored in commissions, the cost of keeping a bank account, etc., we thought it best just to have an account in local currency.)

We opened the account with $100 cash.  Then, we wired over a very large amount to cover the cost of a car and daily expenses for a year (like petrol, i.e., gasoline; gas stations are on a cash-only basis and at ~$6.80/gallon you go through a lot of cash to keep your tank full). Because there are Barclay’s branches in the U.S. the wire fee was $20 (as compared to a $40 wire fee for international transfers).  We can withdraw up to 5 million kwatcha a day (about $1000) but can only withdraw 2 million at a time.  We were given an ATM card just like in the U.S. and there are lots of Barclay’s ATM machines at convenient spots around town.

There are slight fees for withdrawing money from an ATM (from 50 cents to $1.50 depending on the amount you withdraw) and for various other transactions.  The checks are enormous, as I noted in a previous post.

(Here’s a comparison of U.S. checks to the checks here.)

Give yourself time to write a check here, it takes a while.  Here’s an example of one I wrote today: three-million, six hundred and sixty thousand, four hundred and fifty-eight kwatcha.  Oh, and as an aside, the DAY always comes before the month (similar to Europe).  So, today’s date is 17-3-11.  (March 17, 2011)  Our landlord just wrote today and said that even though our recent rent payment to him was written on a U.S. check from a U.S. bank that the bank he tried to deposit it in (the one where he’s a VP or something) read the date as May 3, 2011 instead of March 5, 2011, because I had written the date as 3-5-11, so could I please spell out the month in the future so there’d be no confusion on either side of the world.

One other thing that I learned after a month being here is that “pin” is used as short-hand for thousand.  So, if someone says an item costs 50 pin, that means it costs 50,000 kwatcha.  (It is much easier to say — three syllables vs. six.)

As I mentioned above most transactions are in cash.  Because the currency only comes in 50,000 notes or lower, you end up walking around with stacks of cash.  When we bought our car we had a stack of cash that was literally about 8 inches high.  (Ladies, bring big purses.)

Well, that’s about all I can think of regarding the process of banking here in Zambia.  The main difference between here and the U.S. is that you have to carry a LOT of currency, because there are no large bills and/or because you never know if a credit card will be accepted.


About Kimm X Jayne

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12 Responses to Banking in Zambia

  1. Christy says:

    Thanks for the explanation, Kimm! Do you worry at all about security carrying cash? Zambia seemed fairly safe, but I’d still wonder. 🙂

  2. Maureen Witte says:

    It’s mind boggling! You seem to be navigating the situation well. Good work!

  3. Mikey says:

    I bet it won’t be long before you’re changing money to get that extra 100 kwatcha!

  4. Kimm X Jayne says:

    We’re really pretty cautious in that we don’t walk around the streets at night (the malls are okay) and when we do go into unfamiliar parts of town we’re usually in 2s or 3s and/or have someone local with us. I’ve never felt unsafe and I think even in the compounds we’d actually be safe. Also, we avoid wearing flashy jewelry or watches. For instance, I have a glittery sparkly 15 year anniversary ring that I usually never wear here. I just don’t want to draw attention like that.

  5. dizzy says:

    How might i withdraw cash using a credit card? which bank auto teller machines would cough out the cash?

    • Kimm X Jayne says:

      Usually the machines will have the visa/master card symbols on them if they take them. I think most of them do. However, I did this once and the charge was about $30!! Outrageous. Better to either go to places that take credit cards (then you get a good exchange rate) or just exchange money yourself.

  6. Vivian says:

    What are some of the names of the banks in the US that deal directly with Barclays bank in Zambia(i.e. Bank of America, City Bank).?

  7. Anonymous says:

    Hi, does anyone know if you can open a bank account while in the country on a tourist visa or are you asked to show a work permit? Thanks!

    • Kimm X Jayne says:

      I have no idea but it was kind of difficult to get a bank account. You’re supposed to have a “letter of introduction” or reference from someone vouching for your good character and financial ability. It’s definitely a 2-4 day process.

  8. Bwalya says:

    I was born and raised in Lusaka (live in London now).. Thought I would de-mystify the ‘pin’ short hand term. When I was younger we did not have large denominations of Kwacha like they had when you lived in Zambia (currency has been re-based as of 2013 with smaller denominations), the biggest note was K100 and you needed 10 of those for a thousand (obviously 🙂 The money you got from or deposited into the bank was grouped in ten K100’s held together by a paper clip.. a ‘pin’ … get it? And then a hundred of the pin were bound by a rubber band and called a ‘bandru’ i.e. ‘bundle’ but you don’t hear this any more. My mother owned a business and I spent my childhood counting cash.

    Your blog makes me miss home 🙂

  9. Chitengi Elijah says:

    I want 2 open up an account here in kitwe but i dont know steps to follow pliz help me.

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