ZAMBIAN BANKS URGED TO LOWER THEIR LENDING RATES

LUSAKA, Zambian commercial banks have been urged to lower their lending rates in view the recent move by the central bank to reduce its benchmark policy rate and the statutory reserve ration which it imposes on commercial banks.

Earlier this month, the Bank of Zambia reduced its policy rate from 12.5 per cent to 11 percent and further reduced the statutory reserve ratio (SRR) — the minimum amount of reserves that must be held by commercial banks — from 12.5 per cent to 9.5 per cent.

Bankers Association of Zambia Chief Executive Officer Leonard Mwanza said Sunday that the association expected commercial banks to reciprocate the government’s move of reducing the policy rate by also reducing their lending rates.

Mwanza said the Central Bank’s move would help ensure that commercial banks have sufficient funds which they should in turn lend to their customers.

Mubanga Mwiki, the Chief Executive of Micro Finance Zambia Limited, a registered deposit-taking Non-Bank Financial Institution, said the reduced policy rate would help a lot of people because lending would become cheaper. He was optimistic that the reduction in the policy rate and bank interest rates would continue in view of the prevailing favourable economic conditions.

Source: NAM NEWS NETWORK

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