THE Zambia Union of Financial Institutions and Allied Workers (ZUFIAW) has urged financial institutions to consider lowering the interest rates this year following a drastic drop in inflation rate.
The inflation has in the last six months dropped from more than 20 per cent to the current 7.5 per cent.
The current interest rate which varies from bank to bank is between 35 and 40 per cent.
ZUFIUW president Ackim Mweemba said in an interview that there was no moral justification for banks to continue with the high interest rates when the inflation rate had drastically dropped.
He said that it was unfair for Zambian workers and firms to borrow money from financial institution with a high interest rate when inflation rate was in single digit.
“The year 2017 should be a different year, we want workers and companies to enjoy the benefit of the drop in the inflation rate. We want them to borrow money at an affordable rate to enable them invest it in the economy, so it is immoral for banks to charge high interest rates,” he said.
Mr Mweemba said 2016 was a tough year for financial institution because Government failed to meet its obligation of paying suppliers of goods and services who borrowed money from banks.
He urged Government to consider paying off arrears to contractors and suppliers of goods and services in full to enable them pay back their loans.
He said that suppliers of goods and services were important in driving the economic growth of the country hence the need for them to be paid all their arrears.