President RUPIAH BANDA has expressed concern over the high lending rates that banks charge on loans.
President BANDA said the high lending rates would only discourage Zambians from accessing financial services from Banks.
The President said this when he officially commissioned the First National Bank- FNB in Lusaka.
The President also urged FNB to extend its services to rural areas.
He said by doing so the Bank would help mobilise savings from the rural population who depend on agriculture.
Mr BANDA also advised the Bank to design products that are friendly for SME’s.
President BANDA said the SME sector is critical to Zambia’s economic growth and employment creation.
South African Ambassador to Zambia, Moses Chikane disclosed that South African Investment in Zambia now stands at 400 million dollars.
He said FNB’s entry in Zambian financial sector should help address the problem of access to financial services.
FNB South Africa, Chief Executive Officer Michael Jordan said the bank plans to expand its operations throughout Africa.
He said the bank would soon start operating in Angola, Tanzania and Nigeria.
Mr Jordan said the bank wants set up branches in all the nine provinces of Zambia.
FNB has invested about 75 millions dollars in the country.
It becomes the 16 commercial bank operating in Zambia and the fifth to open doors this year alone.
[ZNBC]
Mr President Banking is all about risk management!! high risk high returns (interest rates)!!!! Look at you inflation rate and your exchange rate, these two will influence your lending rate.
Banda Bwezani was one of the directors at one defunct African Commercial Bank in Chipata and never saw anything wrong with high lending rates. Now he want to counsel FNB, foolish. He should justify his action at ACB before openning his closed eyes, bakabolala.
These are the topics I like but these are also the things that make me even more upset with these lazy, lazy, dishonest, empty head, foolish leaders. RB why can you not tell the people the truth??? Whay can you not tell people whats really causing it and what actions you intend to take?? Why are you such a hypocrite and liar?? Anyone thats real a few pages on basic economics knows that its Govt Public Sector Borrowing Requirement (P.S.B.R) driven by poor Fiscal Management (Govt expenditure, budgetary imbalance). It’s you RB thats causing this because you are competing with the Private sector for the little available finance banks are willing to lend.
RB you know that.. RB you know that in your 9 motnhs your increased the amount of money you’ve borrwed from the banks and the public , through governemnt bonds & treasury bill auctions through Bank of Zambia, by over K800billion!!! All because you have increased government expediture tenfold (15% salary increases, flying around etc) and Tax revenues have not grown at all resulting in Funding Deficit which you decided to go to borrow from the public throughBOZ bond auctions, and you even offer better Interest Rates / yields than before!!! from a ave yields of 15% on 2 yr Bonds you Levy PM Sc left as policy, you are now offering 25% return to Banks.. All because you have not been tight on Expenditure and are fiscally indisciplined which was the oppoisite to LEVY WAS AND DID
Why RB why.. You know that when you offer to borrow from bank at higher yields, bank will lend to you preferentially and place the excess to the public at your rate which is now 25%, plus 7% margin to reflect the additional risk of lending to individuals as opposed to Govt who can print the Kwacha!!! This basic economics.. You fired Magande now look at what you caused. magande drove the FISCAL policy that enabled SME’s and Corporates to Access funds from teh bank because banks have nowhere to lend the money because at the peak of Magande LPM policy , govt restricted borrowing to under K50billion per month and offered lower rates as teh US Federal reserve has done to channel more funds into the the productive economic sector. Govt had to cut expenditure.
and LPM & Magande did both. The cut Govt spending, therefore reduced borrwing (PSBR requireent) and increased taxes to balance it out (though this should not be too high). This is the formula for economic growth, higher production, increasesd employment, attractive investment. This is basic economics.. This was also the benchmark or requeirement under the HIPC debt relief scheme. Thats why we saw economic growth, monthy trade surpluses, Import cover growth from 2. months to 7 months cover, quantum increase in jobs data , reduced unemployemnt for almost 80% down to just under 70%, and Foreign currency Reserve postion (savings) of over 2illion USD!! Things were happening.. Why did God take this man away and leave us with this bafoon.. RB has no clue and is bent on destryoing all progress
RB and his wolves have revsed every single key benchmark and things a looking worse with that unacceptable buddetg tha proposed 25% increase in Public Sector Borrowing to cover the so called lost in Donor funds, but ironically still expanded the gross expenditure by nearly 3 trillion Kwacha from 12 trillion to 16 trillion, instead of maintainng or even reducing to say 11trillion to reflec tough economic times, and intead look for privet sector market driven policies and PPP(private public partnership) to drive some of Projects Government inded to spend on..
I have really tried to cieve sense in what this president says. Every time he makes a statement, it veers to the dark side. At first I was wondering if it was due to some deficience of the mind, but I came to realise that these are probably spoiled people from UNIP stupidity. It does not really matter at what age, but if someone has never known truth will never come out right literaly on anything. Look carefully, for him he thinks he has solved the Chiluba, Zamtel and Petrol issues and moved on to correct the lending rates. wow, what a miscalculation?
Every single Economic target has gone the otehr was. FX Reserves down to 1 billion USD from LPM’s 2.5, Import cover down to 3-4 motnhs from 7, 20% Increase in Public consumption spending, increased borrowing, resultantly increased Inflation from 9% to 15%, thereby Commercial bank base lending rates by 10%, increased company failures, increased unemployement by over 10% from just under 70% to almost 80%, On Social targets. my guess is, Increased Maternal Mortality, increased infant mortality, reduced funding for social infrastructure-schools, hopitals, roads with all the mess at Ministry of helath. I HATE RUPIAH BANDA So much you dont know.how can you not?? tears come to my eyes typing this. the worst thing is he doesnt care at all.. He never adress the above Must do’s. I ned here
He has managed to politicise everything in the country and it is hard to do business. Always fighting with everyone and thugs or militias disrupting well intended press conferences and there he is mute. Is this person really normal. We did not expect much from him but to just sit and eat tax payers money. But look, he is confusing everything, tinkering in almost everything. He is in Zamtel, Chiluba’s thing, Visilu, and even when he goes to UN, his body guard ends up on the floor. What a shame Zambia has for Pres.
I wonder why RB is surprised at the rate of lending. I hope he does not think the banks can simply reduce their rates without taking into account the wider Zambian economic context, of which, arguabley, RB is responsible. Agree with him on need for support for SME’s. I did a study 14 yrs ago focusing on SIDO, its impact on SME’s and their (potential) to the economy. The conclusion in a nutshell was that sme’s and the informal sector could play a very huge role in employement creation, Domestic demand for goods/services, increased economic output, and reduced poverty ( i summarise). In this regard, RB should facilitate the nurturing of these SME’s (incl informal sector), and not leave it to private enterprise to do so. At an advanced level of development the private sector may step in,…
12 continued. but they will have no incentive to seek cost reductions unless there is competition in the form of another lender, eg SIDO or GRZ. I do not believe CEE fund serves this purpose well due to the red tape. So in conclusion, the buck stops with GRZ. Governments of the day should take ownership of problems and seek solutions and not blame past decisions.
Bwana, lower lending rates are not just forced on the througts of Banks. These are a result of good government policy and sound economic factors. In a roten system where one person or a group of Kabwalalas can get awaya with 27 billion, you can not jump on the podium and proclaim that lending rates be reduced. That is madness and a serious lack of basic economical fundamentals. Almost all economical indicators are based on Government performance, including recession and therefore high performing government and good policies would lower what you are saying. The problem is you Nyamasoya
CIAO & Digga
Thumbs up guys! You can realy analyse the behaviour of RB, it reminds me of EC 125 and Dr Mwikisa!
So, that we know. But what is the solution. Surelly you cant just jump on the podium and say that. Tell us what GRZ is doing about it. This is like what you said last time that education is good for SADC region. AAAHHHHH, that we know MUdala, but what is it that you want to do about it. May be this will set you well to explain your presidency
Bane we have talked much. We need to plan for the way forwrad. Honestly we cant have leaders like RUPIAH. This man doesnt know what he is doing. Our country needs serious minds to solve our problems. If he is not making a statement from the airport, he is opening some business which Zambians do not benefit from. All the development/projects they have come up with are questionable. They only talk about development on by-elections. People of Solwezi must prepare themselves fake promises. Please do not vote for them!
RB should also worry about the performance of the Citizens Economic Empowerment Fund. Is it really working to expectations? Applications take ages to process, there just does not seem to be any seriousness by the so-called co-ordinators. Maybe this fund should be administered by commercial banks.There is absolutely no value in going through the District Commisioners’ bureaucracy.