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Alba Iulia
Wednesday, August 5, 2020

FNB reduces its high lending rate of between 44 – 48 % by 1.5%

Headlines FNB reduces its high lending rate of between 44 - 48...

FNB Makeni Branch in Zambia
FNB Makeni Branch in Zambia
FIRST National Bank (FNB) Zambia Limited has complemented the central bank’s move to reduce monetary policy rate by also cutting the interest rate by 1.5 percent effective next month to pass on the benefits to customers.

On Wednesday, the Bank of Zambia’s Monetary Policy Committee (MPC) reduced the monetary policy rate from 15.5 percent to 14 percent.

When the central bank changes its official interest rate known as bank rate, it is attempting to influence the overall level of activity in the economy to keep the demand for, and supply of, goods and services roughly in balance.

FNB, whose interest rates range between 44 – 48 percent, says the customer facilities vary depending on their credit profile.

“FNB hereby notifies all our esteemed customers that current Kwacha borrowings that are linked to the MPC rate will decrease by 1.5 percent effective March 1, 2017,” it said in its daily newsletter.
The bank notes that the move will immediately pass on the benefit of the reduction in interest rates to customers and lower the cost of credit, hence increased economic activity in the productive sectors of the economy.

“From the monetary policy actions taken by the central bank it is clear to see that the MPC feels the local economy is set for a turnaround. Inflation has come off and looks to remain stable. The exchange rate has also been stable and has recently outperformed most expectations, with the help of flows earmarked for the bond tender,” FNB says.

It also notes that to further increase money supply, the Statutory Reserve Ratio, which is the minimum amounts certain institutions, such as financial entities and insurers, must maintain as liquid funds to avoid insolvency and are used to influence liquidity and interest rates, was also reduced from 18 percent to 15.5 percent.

FNB says the measures are aimed at increasing access to credit.

Meanwhile, Commercial banks have been challenged to reconsider their lending conditions in order to increase financial inclusion and contribute to growing the economic.

MTN Chief Executive Officer, Charles Molapisi said that unless leading rates are lowered and conditions relaxed, the economy will not be growing at its full potential.

Mr. Molapisi said this was why MTN has introduced Kongola which allows subscribers to borrow up to K750 at lending rates of between 12 and 14 percent.

Mr. Molapisi said that in the last six months MTN has lent out 56 million Kwacha to people using Kongola under mobile money, a money transfer and payment platform.

Mr Molapisi said that the repayment rate is at 98 percent with repeat borrowing hitting over 60 percent.


  1. To be honest, FNB’s PR department ought to be ashamed of even putting out this information. Where in the civilized world have you ever heard an elite institution lending money at near 50% rate when averaged cost of borrowing in the first world is near zero %?

    This is just plain criminal to do such a diabolical thing in a poor country like Zambia that needs to develop. I doubt they can even lend at this rate in their country in South Africa. In a normal society, this ought to be a national scandal!!!

    Thanks to what MTN Mobile money is doing. The elite Banking system in Zambia needs to be disrupted. It is abusive and blood sucking, feeding on the poor and ignorant.

    Just don’t borrow from these white color criminals who have legitimized and legalized stealing money from the…

    • Just don’t borrow from these white color criminals who have legitimized and legalized stealing money from the poor. SHAME SHAME SHAME !!!!

    • @MMD Chief Bootlicker, I agree with you on this. Access to cheap funding and credit is required by the private sector in order to develop Manufacturing and Production within Zambia. Most of the so called Developed World can access borrowing at under 5%. The interest rate payments in Zambia of 45% to 50% are just ridiculous.

    • Disappointed with Your comment Mr. Bootlicker much as I agree with the fact that lending rates are high … the economic fundamentals in Zambia cannot be compared to the near 0 rate countries that you are bringing in this argument. If you argue from a total laymans perspective I will agree with you since its pretty much emotive than based on facts on the Ground. The PF mismanaged the fiscal side to the economy and this is what you are trying at all cost not to bring to the fore…. this pushed up inflation to near 30%..what you need to acknowledge is that despite infl. now @ 6.8% the prices have now remained relatively high. Kwacha also devalued at a fast rate and despite lowering and stabilising has also remained at high FX. Banks do their assessments also covering risk which is in…

    • Considering the risk of borrowing money in zambia to anyone. Banks are forever chasing their monies and coupled with the high volatility of the kwacha, these rates shouldn’t be too shocking.

      There are credit cards who do the same here in the UK. So anyone condemning the banks doesn’t quiet understanding the risk appetite that these banks have to accept in borrowing anyone for that matter.

      Are the rates high ? Yes but like explained above, it’s the banking system and trust that is broken in your country starting with the bank of Zambia.

      Would I personally borrow at that sort of rate ? No.



    • Am I reading correctly? 44-48% interest rates? That is absolute criminality and our economists are happy with these slave traders doing this to our people? It’s like charging you for the dam you will build to provide water in your house instead of just calling plumbers to install taps in your house.If there is no system of tracking people to ensure they pay back monies and hence cover risk establish those systems. FNB charges interest rates of 14% in other countries whilst we Zambians will even justify their criminality of charging us 48% interest.If you bank with FNB you deserve each other.

    • Just shut up if you don’t understand your economy. Money was sucked out of circulation with the massive infrastructure PF government undertook. The banks don’t have cash. They must attract deposits, including deposits from zero % interest market, by promising higher return. When huge interest is generated from depositors, and excess liquidity is pumped into the market, naturally, interest rates will fall. Next time, try to be more circumspect before you yada yada

    • Hey folks you are too quick to blame the banks on this lending rate. The main culprit in this is the PF government.

      To jig your poor memory again, remember when PF borrowed massively from domestic banks and gun point, the banks decided to lend huge sums to PF in exchange for freedom to raise lending rates so that they can recover some of the money PF is failing to pay back. In reality the PF borrowed money using bank’s high lending rate as collateral. On top that, the PF will start raiding your bank accounts.

      So folks please direct all that anger at your PF not banks. Otherwise if PF had refused to agree to what Banks proposed in exchange for lending PF money, banks had only one option left, that is to leave the country all together.

      PF has wholly authorised this loan shark type…

    • @PF chief bootlicker.

      How convenient for you to blame the banks instead of the PF government that has allowed this shylock lending practice to take root among Banks in Zambia. To you PF is 100% a saint!

      PF has wholly authorised this loan shark type of lending in Zambia thats why they are quiet and yet punishing a local business man and woman who wants to hike prices in line with expensive credit.

      This explains why PF is totally mute on the issue. The only statement expected from them is , Zambia under PF is a market economy and rates are set market forces; hypocritical of PF indeed. And yet they are busy controlling prices to stifle a poor Zambia business man.

      Only UPND will fix this mess created by PF.

      VIVA HH and GBM

    • Guys any data on what is happening at ECZ? I need various sources to confirm the rumours that Akufuna, Isaacs and Chulu have resigned or planning to resign.

    • This is a crime, damn is it Kaloba?? they should be ashamed of them selves. what rubbish is that. I wil close my account with these thieves.

    • It’s kaloba or exploitation pure and simple.. They know very well that people are poor and desperate enough to agree to such rates! It should not be allowed for a bank, but note others in the compound will do the same at even higher rates like 100%/week

  2. Please the Government of Zambia, take steps to criminalize, prosecute and penalize all the financial institutions that pretend to HELP people but obliterate your people by lending money to your people at such abnormal interest rates!! This truly a crime against humanity. This is biggest weapon of mass destruction against poor people and indigenous people of Zambia and Africa

  3. This is stupid. Of course they have had to reduce of the reduction by the central bank. If you FNB had reduced without BOZ it would have been news. Not this.

    • No they didnt have to reduce nor are they obliged to do so. It is called moral suasion. Have you heard any of the other banks announcing the same? NO….because some of them won’t reduce their rates because they understand that any savings resulting from the reduction by BoZ rate are probably overtaken and whipped out by other fundamentals such as inflation!!

  4. FNB steal the money of customers.The monthly charge is too much.FNB will start losing customer soon.They got K250 from my account.Twalaisala acccount nomba from this bank.

  5. Alot of ignorance here by all those who are condemning FNB. The starting point of reference is the BOZ rate referred to in the article which has come down from 15.5 to 14%. Do you know what that rate is in the developed countries you are comparing with? It is almost at 0. So if it is set as high as 15% in Zambia it is a reflection of the state of economy in which the commercial banks are operating. Then on top of that banks have to price for their cost of capital, operating costs and default risk. In Zambia default risk is very high in part due to under-developed credit bureaus. So the economic fundamentals in Zambia are wrong and the cost of lending is high..a cost that is passed on to the borrower. Before you ask how come MTN is lending at 12-14% I can guarantee that is a monthly…

  6. Contd….. I can guarantee that is a monthly interest rate and not the annual interest rate that FNB is quoted on. We are comparing apples with lemons here. Ask MTN their annual interest rate and you will find it is in excess of 60%.

  7. Zambia genuinely is a very very docile country with a careless leadership. Why, these are Mafioso rates by any standard. So criminal organisations have set up shop in Zambia and call themselves ‘bank’ to fleece the sheep like people! This is what happens when you have a hard core bandit as president. What a joke of a country!

  8. In fact, MTNs rate may be 144% per annum, that is 12% x 12 months deending on whether they are using simple or compound interest methodology

  9. How does BOZ also allow such huge rate increase from 15% repo rate to 45 come on even if its free trade…no wonder investors are not coming…BOZ and Trade/Finance ministers should liaise on this and think globally not local….appointing old dogs in the 21st century what do you expect

  10. Extortionist lending rates. Wonder no more why most Zambians still live in underclass housing in Misisi,Kamwala and Kalingalinga.

  11. I would like to know what interest rates are on interest bearing accounts such savings accounts. Is FNB also paying anywhere closer to 40% to customers with savings in their accounts?

  12. The lending rate in South Africa is 10.5%.https://www.fnb.co.za/rates/LendingRates.html and in Zambia 44-48%-Amazing. And as for those who are arguing that this is normal on the basis of risk, default and the like please know that if you go to the bank to borrow there is a cost for borrowing one of which is Insurance that covers the risks you are talking about. It’s so hard in Zambia to start a business because of the debt to equity ratio precisely because the debt part is so hard to come by. First employer’s guarantee, then collateral, title deeds…eish, how do you stimulate an economy like that?

  13. @ blabla and Mushota, even if the MPC was at 15% in UK the lending rates of banks would be less than 25%. You talk of risk. The risk you are talking about is covered by the collateral these banks collect from people they lend money to and the insurance cover. These are some of the issues the minister of finance should have as P1 because if lending rates are low there will be a lot of economic activities in the country. More jobs will be created because business will expand due to freed cash flow and many more companies will come on board. These banks should be sincere in there dealings. Adding 30% on MPC is immoral no matter how someone may justify it. Isn’t all these decades they been here testimony enough that Zambia is safer for investment.

    • Great points, I was merely referring to the inability for the banks to recoup the money they lent to start with. It is not the doubtful but just the bad debts.

      My cousin works for FNB and I have had a conversation, with him where he has explained that, persons can use a property as surety to get a loan from the bank but that doesn’t stop them 2 years into repayment to sell their property and well, yes default on the loan itself.

      My point is, you can not compare the rates in third world countries to first world countries.

      Again I do agree the rates re high, but it doesn’t surprise me and I wouldn’t blame the banks
      You might want to find out about the bad debts they carry compared to other developed countriies. Comparing the same rates as you see where you are, is a facade…

  14. @ Musonda,
    the answer to your question is in the TIMES of Zambia Tuesday edition.BOZ had published a schedule of all the commercial banks and what their charges are on all their products.
    You also need to understand that credit comes with a price and its not cheap at all.

  15. Reckless PF Government borrowing and unbridled appetite for reckless expenditure on project that can wait is directly contributing to High interest rates. Just think back where our interest rates and national debt used to be just before PF formed government. Economists sounded the warning but politicians decided to ignore. The went on a rampage borrowing left right and Centre. The end result is what we see, tightening of the monetary policy. There is no cause for celebration with a 1.5 reduction. The best advice is if you are currently in debt, and especially if you are a Christian, get out of debt now! Avoid debt the way you would avoid HIV, Leprosy or cancer! These are very unpredictable times not just for the Zambian economy but the world economy! Wrong chaps are elected into power and…

  16. Surely how can an business borrow at any rate over 30%…its disgusting…no wonder the Chines are taking over; its a shame the govt don’t see a problem because the ministers proxy companies are given GRZ contracts even before the are registered.

  17. Wrong chaps are elected into power and are messing up economic fundamentals big time! Just imagine how fragile our economic fundamentals have become. Just a 1.5% adverse shift spells doom. I have friends who have had their mortgages and loaned cars repossessed and the misery they have put their families is not worth the risk. Banker te munobe!

  18. This is the result of the reckless policies of lead baboon in the maize field M chilufya sata. The same reckless polices that some f00ls on this blog are dancing about being pro poor. Yah. Good. Money in your pockets ati pro poor.

    RB found a sound economy and carried that on even managing to start building roads without $10 billion debt we have.

    Then came the kaponyas who found money in the bank….Ma ma ma…it truly was like a gang of baboons let loose in a maize field. There was browing , stealing and reckless spending on a grand scale as if zambia had the highest oil deposits in the world….

  19. The Zambian economy has always not been stable, due to the high risk of recovering the loans lent out, they increase the interest rates. Firstly, both the statutory reserve ratio and Policy Monitoring Rate are too high, meaning that the liquidity levels are affected and in short banks have little cash to lend out. As long as the economy of Zambia remain stagnant or no reasonable growth annually meaning no significant economic activities, there is no propensity to save by the citizenry and therefore the deposit ratio is below what banks can lend, but the Deposit ratio depends on individual banks. Generally the credit culture in Zambia is poor. You can refer to Credit Referance beareau and Credit rating agencies.

  20. Its called The Crowding Out Effect

    Economics 101

    GRZ raises $5bn but spends $8bn every year.

    They need to borrow the shortfall. This sucks up liquidity in the system and crowds out borrowing by the private sector.

    For the economic students above who wish to compare why local banks charge so much compared to overseas.

    Please explain why on US treasury bill u get a yield of 2,5% but in Zambia its just over 20%. Then you will understand the market.

    Like any commodity, the price of money is based on supply and demand. Too much demand pushes the price (interest rate) up.

  21. MTN is also not an angel here. in fact its the most devil and extortioner. I hear if a person borrows K45 for instance, MTN charges K53.77 after just 2 weeks. Thats 19.5% interest in just 2 weeks,imagine that per year?

  22. The fundamentals have to be looked at first before we compare Zambia to a developed country. There is no comparison here as the outlook for Zambia is negative as per ratings agencies. The Kwacha depreciated 17% in Q4 2016, GDP v Debt servicing is at 20%. Inflation is still in double digits, FDI down 55% and well there is no liquidity. We are not like Japan whose debt to GDP is 200% but have US treasury bonds worth over $20TRN. Zambia’s reserves were spent, so with that comes a high risk of default hence the higher rates by the bank. The countries that are seeing a 14% rate are the likes of Kenya because the CBN has made adequate reserves, and is not commodity dependant.

    • In Kenya, it was a big issue until a regulation was put in place that Central Bank Rate (CBR) was fixed at 10% and commercial banks would only a mark up of 4% for the shilling borrowing. The rate of 48% is too exorbitant even with weak fundamentals highlighted.

  23. There are so many bank charges i feel people ought not to be paying These term structures are onerous on people and some are evidently not legal and should be avoided

  24. Banks are in business and are also trying to survive in this atmosphere of deranged economic fundamentals. When a bank gives you a loan, it is not because they love you. That is how banks make their money. BOZ has also squeezed commercial banks big time.

    Partisan politics aside, a bad economy affects us all. It is therefore important that we call a spade a spade. Reckless government borrowing is the root cause of high interest rates!

  25. Dear All,
    Am lending money at between 5 – 10% IR. Anyone who wants any amount ranging from K1 – K4000 can contact me. Kindly stop bickering about FNB.

  26. 48% interest rate!!!! My Foot!!! THATS KALOBA

    How do expect private sector & economy to grow with such high KALOBA lending rates?

    And some PF00LS see nothing wrong with the economy. I’ve always asked on this website, is Zambia a communist, socialist or capitalist economy? I think none of the above, just a Chipante-pante economy.

    We need single digit inflation & interest rates in order to create jobs & revamp our economy. Only HH & team have intelligence, morality & capability.

  27. Let us stop borrowing. lets us save the little we are earning and invest in small scale business. If not, we never develop. Look at china and India. It took long years of sacrifice, discipline and commitment to be where they are today. No one can ever solve a problem by adding another problem. Just like darkness can only be overcome by light.

  28. The govt inconjuction with the boz are not serious,40% interest rates like the country is at war,,,,damn shame on them.

  29. Where is the 2020vision kaponya singing to us about soon to be Kwm 6 to the dollar and single digit inflation that no one can translate into lower prices ????

  30. Usury!

    And to think, the same banks pay zero (or very pathetic) interest on savings while charging endless ledger fees, transaction fees, ATM fees, standing in queue fees, and all kinds of other crazy charges on any savings you may deposit saying this is the “only way” they make money when in reality they lend YOUR money out at usurious rates. Shame!

    Truly, the only good “banks” are the banks of the Zambezi river! Better is to bury your money in the ground.

  31. @shaka.
    China and India self displine?..analyse it this way..ask yourself how many Zambians have gone to China or India to extract minerals there.. how many Chineese and indians are mining our minerals in here in Zambia or in African countries todate?This is where Africans are loosing out.Calls for exporting finished products have not yet been implemented they still are just mere rhetoric calls.So never dream or expect to reach where China is economically.

  32. The base rate is at 14%,how come the CPI is at 7.5%? So the true CPI is about 28% to 32% and this explains why the banks are charge between 44% to 50%. So do not be surprised the banks are absolutely correct.

  33. Who really regulates the banking sector in Zambia? The lending rate in the country must must be slashed to below 10%. These banks are criminals and this is not only FNB doing this but all the commercial banks and money lenders. Kaloba is now legalised by these institutions.

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