With only a day remaining before the K10 billion medium-term financing facility takes effect, the Bankers Association of Zambia (BAZ) has pledged to remain resolute to protecting the Zambian businesses during and after the Covid-19 pandemic.
Government through the Bank of Zambia has provided a K10 billion line of credit to banks that may face liquidity challenges and revoked statutory instrument for classification and provisioning of loans.
This is aimed at encouraging financial service providers to provide relief to the private sector and facilitate long term lending to productive sectors of the economy.
BAZ Chairperson Herman Kasekende welcomed government intervention and explained that the stimulus package and the accommodative loan loss provisioning standards issued under the gazette will greatly help in protecting businesses and households from financial shocks related to Covid-19.
In a press statement made available to ZANIS in Lusaka today, Mr. Kasekende said the association recognizes the economic challenges facing the nation adding that Covid-19 has worsened the situation.
He has since commended government for the decisive actions taken and implemented to protect lives and slow the spread of the virus.
“Banks play a vital role in the economy and are therefore designated as essential services provider, to this effect our overarching response to Covid-19 pandemic hinges on the following, supporting our staff and customers and complementing government and BoZ efforts in ensuring that the economic shocks are well managed within the framework of the comprehensive measures,” he said.
Mr. Kasekende explained that to this effect, all channels will remain open during this period to ensure that clients continue accessing essential financial services while observing high levels of health and safety measures such social distancing, wearing of face masks and constant hand washing for both clients and staff.
He also assured that all banks will leave ATMs operational while clients should utilize digital channels of transacting such as online and mobile banking and only visit the branches when it is necessary.
“Banks have removed the fees on e-wallet transfers of up to K150.00 and will comply with the directives issued by the Bank of Zambia under gazette notice No. 186 dated 3rd April 2020 on prohibition against unwarranted charges and fees to encourage the use of digital and electronic payment channels,” he noted.
Mr. Kasekende added that banks are also agreeable to restructure loans, give repayment holidays, responsibly support customers and preserve the safety and soundness of the financial sector while operating within the relevant regulatory frameworks.
He further stated that particular attention will be given to sectors that are prioritized in the Seventh National Development Plan, adding that bank clients in need of financial support should contact their respective banks for specific terms and conditions.
Indeed banks can make a big difference in assisting the revitalising the Zambia economy if only they discarded their exploitative tendencies. Truth be told, obtaining a bank loan to finance a business is currently suicidal. Ask one Mr Chilala
Excellent and responsible measure by a level headed government that doesn’t rush to implement things. Best to get things right and make informed decisions rather than rush and crash as the Facebook president hh wanted us to.
Osapasana chabe mweka mweka Ku town. Naise ma small scale farmers Ku kapini – chipilepile settlement tifuna kuti tikumbe ma bole holes kuti tikazi Lima throughout the year. Zikomo
The reality is different because several banks engage predatory tactics that have caused many SMEs and individuals to lose their property because they borrowed a few Kwacha. I don’t even know why he has availed these funds because banks stopped funding GRZ tenders and LPOs long ago. Even micro finance institutions stopped Invoice Discounting and Order Financing on GRZ tenders long ago. The Minister must instead work at bringing back credibility to GRZ business. Today even civil servants can’t borrow to pay for school fees because GRZ is owing almost every sector. Even ZRA has stopped pushing SMEs for TOT because they just show officers unpaid invoices. This is unfortunate because Zambia is classified as a middle income country and therefore doesn’t qualify for the relief that has been…
granted to countries like Malawi by the IMF. So please channel those funds to local debt servicing and most things will take care of themselves
If govt truly wants to assist SMEs why put the lending rate at 14% …
On paper blah blah blah but in reality this is just one way of stealing from small businesses….14% or more lending rate….simply SMEs will be enslaved by the lending banks as usual
Kaizar Zulu please remind bandit President Lungu that the person he was worried about and shading tears for Boris Johnson is much much alive so let Lungu stop crying…Makaka President showing sympathy to western leaders and yet your own citizen are dying every day and the same Johnson walked out of the UN general meeting when Lungu stepped up to the podium
LT where is my post? I will state it again. The good intention here will be diluted by the propensity of our banks for predatory tactics. Many SMEs that fell for bank loans have disappeared from the surface of the earth
Please read the following article on your comments https://www.lusakatimes.com/2018/12/18/lt-where-is-my-comment/
I LIKE @Ayatollah . HIS /HER analysis is always deep and well informed. Now this country needs such people in their thousands if not millions. Now in contrast, you have this SYCOPHANT KAIZER ZULU pretender who just YAPS NONSENSE…I doubt if this guy even finished his Grade 9. His argument is always centered around VERY NARROW HAND TO MOUTH BELLY politics. Always talking about HH as if HH is in Government. You ‘WON’ elections so DEAL WITH THE ISSUES!!! In the meantime :
**links not allowed**
Banks from BOZ to ‘Man in the Van Bank’ must reduce interest rates. Even if one has access to credit, it does not business case that the interest rate is 30%..
Every serious Reserve Bank is reducing interest rate…we expect BOZ to lead…By the way, lets relax the collateral nonsense.
Microfinance institutions have stopped lending to civil servants long before this Covid-19 Pandemic because GRZ has failed to remit the deductions. So will they also be able to to access loans from this line of credit?
The IMF has released a basic Q&A on the kinds of facilities which are available at IMF,” But South Africa’s Treasury Chief Tito Mboweni said, and quote: “we are not looking for budget support, we would be looking for the COVID-19 specific packages that we can access, and we are talking to them about that. “We are looking at programmes which would not be accompanied by any structural adjustment programme,” he said. “We know what to do, we know what our structural reform programme is. We will not be looking into that at all.”
Look at this confidence, ‘we know what to do’. It’s not like this Bisa/Bemba ***** at the treasury who knows nothing!
At least the K10 billion will help businesses survive through this tough time of corona virus lock down every where.