Financial sector development broadly refers to: Improved efficiency and competitiveness of the sector; enhanced choices of financial products and services; increased financial inclusion; diversified institutions operating in the sector; increased financial intermediation; and expansion in the regulation and stability of the sector. A deep and inclusive financial sector is generally associated with financial sector efficiencies that affect all other sectors of the economy positively, thereby creating an enabling environment for economic growth and development.

The overall strategic guidance and coordination of the financial sector in Zambia is done by the Ministry of Finance through the National Financial Sector Development Policy (2017) and the National Financial Inclusion Strategy (2017 - 2022), whose vision is "to achieve universal access to and usage of a broad range of quality and affordable financial services".

In terms of regulation, there are three main regulators of the financial sector. These are:

1. The Bank of Zambia (BoZ), which is responsible for monetary and supervisory policy and regulates banks and other financial service institutions registered under the Banking and Financial Services Act, Chapter 387 of the Laws of Zambia.
2. The Securities and Exchange Commission (SEC), which is responsible for the supervision and development of the Zambian Capital Markets; Licensing, registration and authorization for financial intermediaries, issuers of debt and equity instruments and collective investment schemes. This role is prescribed under the Securities Act no. 41 of 2016.
3. The Pensions and Insurance Authority (PIA), which regulates the conduct of the pension and insurance industry through prudential supervision in order to protect the interest of pension scheme members and insurance policyholders. This is done under the provisions of the Pension Scheme Regulation Act No. 28 of 1996.

Other Partner regulators include the following: 

1. Competition and Consumer Protection Commission (CCPC) which regulates market conduct and consumer protection in Zambia;
2. Zambia Information and Communication Technology Authority (ZICTA), responsible for regulating and supervising the Information Communication Technology (ICT) environment in the country; and
3. Patents and Companies Registration Agency (PACRA) responsible for the registration and licensing of companies in Zambia.

List of institutions regulated by the three main financial sector regulators

Institutions regulated by the Bank of Zambia:

1. Commercial Banks
2. Leasing and Finance Companies
3. Building Societies
4. Micro-Finance Institutions
5. Development Finance Institutions
6. Savings and Credit Institutions
7. Foreign Exchange Bureaux
8. Credit Reference Bureau

Institutions regulated by the Securities and Exchange Commission:

1. Brokerage firms
2. Fund managers
3. Custodian banks
4. Listed companies

Institutions regulated by the Pensions and Insurance Authority:

1. Reinsurance Companies and Brokers
2. General and Life Insurance Companies
3. Life Insurance Companies
4. Insurance Brokers
5. Insurance Agents
6. Motor Assessors
7. Loss Adjusters
8. Risk Surveyors 

The Financial Sector Development Plan (FSDP), which ran from 2004 - 2009 under Phase I and 2010 - 2015 under Phase II, is one of Government's financial sector reform programmes whose purpose was to realize a stable, sound and market based financial sector that would support efficient resource mobilization necessary for economic diversification and sustainable growth.

Notwithstanding the closure of the FSDP project in 2015, the Board of the Bank of Zambia determined it appropriate to integrate some of this work into the Bank's structure to be undertaken by a dedicated unit called the Financial Sector Development (FSD) Unit. One of the main functions of the dedicated FSD Unit at BoZ is to develop successor financial deepening and financial inclusion strategies to the FSDP through multi-stakeholder private and public sector partnerships.