FINANCE Minister Alexander Chikwanda has directed commercial banks in Zambia to increase interest for depositors.
The minister said the move was to curb the current mismatch of rates banks charged borrowers and interest offered to depositors.
Speaking in Choma yesterday at the official opening of an Investrust branch, Mr Chikwanda described the mismatch as a disincentive to would be depositors adding that it militated against the expansion of banking services.
He said banks played an important role in national development by being institutional mechanisms for mobilisation of capital and channeling capital enterprises.
“In this process the terms, which is the interest rates at which the money is dispensed cannot be a matter of indifference because the cost of money determines various other costs in the economy. This is the principal consideration of Government assigning prominent consideration to seeing a drastic reduction in interest rates,” he said.
The minister commended Investrust’s expansion strategy and its growth saying it had grown at a robust pace with its operations and financial performance showing an upward swing.
The bank’s total assets increased from K419 million in 2007 to K1.3 billion as at December 31, 2012.
“The bank from inception has operated on an adequate capital structure and will strive to meet the revised capital requirement set by the Central Bank in the expected time frame,” he said.
He commended the bank’s initiative of branch expansion where it had so far invested over K21million from January this year.
Investrust Bank Managing Director Friday Ndhlovu said the bank’s short term strategy was to be in all provincial centres to improve on the saving culture of the majority Zambians.
He said the bank invested about K3.5 million for the opening of the branch. He said the bank would continue to be more innovative and work in line with international banking standards thus contributing positively to national development.
Mr Ndhlovu said the bank had special products for the people of Choma, and would ensure that it fully supported the agriculture and livestock sectors.
To this effect the bank donated K10, 000 for the purchase of dip tank chemicals in an effort to reduce and boost the livestock sector in the province.
“Opening of the Choma branch will surely complement governments efforts to create jobs for ordinary Zambians, a major component of Governments resolve to improve lives of citizens,” he said.
The bank also awarded its first customer at Choma branch, with a heifer.
Niuzeni does the finance minister have the powers to direct banks
He doesnt!
So he can at least speak sense despite causing budget overrun? Any he has already prove to be ichaluposa fye- recycled elementary economist of the stone age.
Yeah he should be focusing on fiscal policy
I think thats Dr Gondwe’s territory
Gandwe is not fit to be BOZ Guvnor!! And Chikanda cant keep a blind eye when things are going wrong because of Gandwe’s massive incompetence. So Chikanda has to do some of Gandwe’s job!
Juunza but when government interferes with BOZ the economy suffers. Inflation usually sets in and goes haywire. BOZ needs to have the authority to set its instruments . I thought our govt knew the need for granting this monetary authority greater independence from direct political influence?
@ True Son of Barotseland.
Are you sure you are the son of Barotseland who doesn’t know how to spell the word Barotseland and can’t even write proper English. if so then it shows that you are very Dull. Go back to night school, perhaps take mathematics and English, maybe for 12 months and hopefully you can be ready to re-write your GCE exams with the help of the invigilator.
you have seen ka?
Iwe Umwina Zambia Inkonko I may not be Bemba but I had a distinction in Grade 7 bemba exams. It certainly wouldn’t be Umwina Zambia inkonko but Umwina Zambia nkonko. Teifyo fine mweba Bemba?
if the finance minister is there to regulate interest rates, then what’s BOZ’s responsibility?
The BOZ Guvnor Gandwe is very incompetent anyway! I dont know how anyone can appoint such an unqualified and incompetent person in that job! Except that PF wanted a weak and desperate “YES BWANA” sort of guy who had just been retrenched from a very small bank in Kenya
He is not Gandwe but GONDWE
And if the FM is able to see the mismatch of intrest rates in commercial banks,then why has Boz turned a blind eye?or it’s inertia on the part.
Because the BOZ Governor Gandwe is lazy, incompetent and lacks experience in the Banking world – especially bank regulation experience which Gandwe had never done in his entire long life!
Actually Gandwe is just a figure head who has no clue on what’s actually going on at BOZ. My wife is a senior manager at BOZ and she tells me that people are having a nice time with such a boss who knows very little about banking in general….and his Deputy Ngandu is even worse!
Wasn’t it yesterday the banks said they will maintain their interest rates at 9.5%?
Hon Chikwanda, am very confused. On what hand, government has capped interest rates, we expect banks to reduce Interest rates on borrowings.
On another hand, alas banks should offer more interest on savings. Which savings anyway since most of our citizens can barely afford 3 meals a day. It’s a hand to mouth situation.
Hon. Chikwanda sir,
1. Gondwe has been on the payroll of Mr. Rajun Mahtani from PTA Bank days. He was given 2% of all money that Gondwe lent to Finance Bank to finance import of Crude Oil, Zambezi Portland Cement and Radison Blu Hotel
2. Gondwe is a spend thrift and womanising maniac not fit for any position in banking system. His track record at DBZ and Natsave speak volume about this caricature of a character. Does one need to be reminded his impregnating the lady at Gas Station?
3. Your ministry and government departments are propping up Finance Bank by parking government money – ZRA, ZESCO, Ministry of Finance, Ministry of Health- the bank pay fraction of interest while invest YOUR money in treasury bills, making millions. Start with withdrawing government money and fair to all…
In the 21st century governments always interfere in the economy of their nations. Without government intervention you’l see selfish people becoming richer and richer while the poor become poorer and poorer. The banking system in Zambia needs serious remaking. If we are to see development banks need to start attracting customers. Money must get to work to be used in building development rather than charging high interest rates as a major source of income for many Zambian banks, they have to be creative in their servicing. Let’s Think Big. 21st century and you can’t open an account without a letter of recommendation?(Finance Bank) Attract customers. Make it easy for any one to have an account. Marketters can save their money in banks which can be used to stimulate economic growth etc…
In the 21st century governments always interfere in the economy of their nations. Without government intervention you’l see selfish people becoming richer and richer while the poor become poorer and poorer. The banking system in Zambia needs serious remaking. If we are to see development banks need to start attracting customers. Money must get to work to be used in building development rather than charging high interest rates as a major source of income for many Zambian banks, they have to be creative in their servicing. Let’s Think Big. 21st century and you can’t open an account without a letter of recommendation?(Finance Bank)
Attract customers. Make it easy for any one to have an account. Marketers can save their money in banks which can be used to stimulate economic growth etc…
Well-spoken Mr Minister, Though should be other ways round to benefit the poor Zambians, They should Drop the borrowing rates to match savings rates and make Loans accessible to SMEs/ Entrepreneurs. Current Rates charged by banks Operating in Zambia is unrealistic and wrong. Barclays, Standard Chartered, Never charge such rates in the countries of origin?? Zambian Central bank is weak and should do more to protect its citizens. Wake up BOZ??? we are in 21st century.