GOVERNMENT has reiterated the need for commercial banks to provide affordable lending by lowering interest rates. Commerce, Trade and Industry deputy minister Keith Mukata said high interest rates in the country have prevented people from accessing capital for various economic activities.
Mr Mukata said this when First National Bank (FNB) launched a vehicle and asset finance product that seeks to finance acquisition of new and used vehicles and equipment.
He said commercial banks should innovate products that meet customers’ needs and spur economic development.
Mr Mukata said the launch of vehicle and asset finance by FNB will encourage long term financing for purchase of equipment in various sectors and unlock opportunities in commerce, trade and industry.
“Financing motor vehicles and assets in the commercial and industrial sectors represents the largest portion of capital investment outlay of any business. It is often the most painful part of the creation of business sustainability because of the huge costs involved,” he said.
Mr Mukata said FNB should also use the product to support small and medium-scale enterprises that are the largest source of employment and yet face a lot of challenges. And FNB Zambia chief executive officer Sarel Van Zyl admitted that high interest rates remain a huge challenge in the country saying commercial banks are working closely with Government and Bank of Zambia to reduce the cost of borrowing.
Mr Van Zyl said the bank is committed to provide long term wealth for all stakeholders through affordable finance. He said the bank’s interest rates currently stand at 17 percent, two points lower than the prevailing rate on the market but is committed to reduce the rates further.
“FNB’s aim is to unlock opportunities that create sustainable wealth for all stakeholders…we want to reduce the cost of borrowing,” he said. Mr Van Zyl said despite the reversal in the acquisition of Finance Bank recently, the bank will remain committed to expand its network in the country.
Meanwhile,Investrust Bank has answered Government’s call for lower Kwacha base lending rate by reducing it from 20 percent to 16 percent per year.
This measure is with effect from tomorrow (November 1, 2011).
Investrust Bank managing director Friday Ndhlovu said the reduction follows numerous appeals and complaints from customers and other stakeholders over the high interest rates prevailing in the country.
Mr Ndhlovu said in a statement issued in Lusaka yesterday that the reduction relates to facilities to be granted after October 31. “The bank took advantage of the strategic planning workshop held last week to discuss this very important subject and after a careful review of the various factors that we always take into account when determining interest rates, we found it necessary to review our base rate downwards,” he said.
Mr Ndhlovu said the bank reviewed its cost structure to ensure it optimises its operating costs and enhance the level of efficiency for the bank to be able to afford such significant reduction.
“The move is aimed at supporting Government’s desire for a vibrant local economy and we are hopeful that with the reduced cost of borrowing, as many businesses as possible will be able to access affordable credit to grow their businesses,” he said.
Mr Ndhlovu said as a local bank, its passion is for a flourishing local private sector and will remain committed to supporting efforts aimed at having a vibrant local economy.
[Zambia Daily Mail]
Good development and good direction for the economy
yes they should come down to atleast 15%.
I think you meant to say ‘at most 15%’
lets put our crazy interests aside and make zambia an excellent class in africa, its the only way.
This is very good investrust we have waited for this this shows that you are a truly zambian bank concerned about the development of our country other banks should follow your lead instead of being busy running cartels and stealing from the already poor majority zambians
that is a step in the right direction and we hope that other banks will emmulate investrust. government should further push for more policies that will be felt by the ordinary Zambian. while that is a good thing its effects will not have immediate impact on ordinary people’s lives. so many need things to be addressed and we commend government for pushing banks to lower their interest rates
Did you need the president to remind you that you have been exploiting the people of Zambia with high interest rates,ATM charges,Statement Charges,even interest is charged on savings.
Help clean up these stupid banking regulations Mr Mukata.
FNB the best bank ever(I hope its the same in Zambia)
Thats what everyone dreamed of…….!\:d/
FNB is very cheap in south africa but here in zambia its the most expensive back. They charge you for depositin, issusing a cheque and for everything this is on top of the monthly charges. Their reason is that at least us we dont hide our charges!!!! Why cant they behave like they do in South Africa????
don’t be mislead South Africa has some of the highest bank charges in the world
i think fnb not getting finace bank was a blessing disguise as well see more competition/better deals now as fnb has to work to harder 2 get a larger following from other banks ,than just being given it
FNB has the lowest rates since I have known it…am migrating my financial dealing to the bank! Double thumbs up FNB!
keep it up FNB, am equally coming to your Bank. We are feed up of these high intrest rates.
I HAVE AN ACCOUNT WITH FNB. MAKING A BANK DRAFT OR TELEGRAPHIC MONEY ORDER IS HIGH AT FNB. TODAY I JUST PAID $45 FOR THE DRAFT PLUS $10 WHEN THE MONEY REACHES UNISA THROUGH ITS ABSA BANK IN SUNNYSIDE, PRETORIA WHILE INDO ZAMBIAN ITS ONLY 5% OF THE MONEY BEING SENT.
FNB SHOULD REDUCE IT MONEY ORDER CHARGES TOO.
Zambian banks i left k20 million in my a/c in zanaco i found the money had reduced to less than 19 million after 12months they were jst chewing my money while i wz on national duties
Zambian banks i left k11 million in my a/c in zanaco i found the money had reduced to less than 10 million after 12months they were jst chewing my money while i wz on national duties
This is why we need our own banks and other financial institutions. Foreign owned ones are only interested in maximizing their profits, much more so when there is a lezzes-fare government in office such as the vanquished MMD.
Same mantra no change, just give people money in their pockets.
Market forces should ensure lower interest rates, unless the banks operate a cartel. There are so many banks in Zambia that competition alone will lower interest rates. Unless there are other costs of doing business in Zambia that have nothing to do with banks.
Can some banker explain why interest rates are so high in Zambia, please.
Must also say that interest rates are high in UK too, for amounts <£7000 you could be paying 17%. Only good thing is banking services are nearly free for person accounts.
The only banks I like are the banks of the Zambezi River.
I thought the Central bank i.e Bank of Zambia has the directive on interest rates, the governments nor its politicians that make statements to best suit their political agendas have no say on the monetary policy of a country, there are various factors as to why the Repo rates and other rates are high in Zambia
fyi South Africa has some of the highest bank charges in the world
Well Done make sure no hidden costs. What are your interest rates??
Thats what we want….Am with FNB down south…I wll open my other account in FNB Zed too.All those chaps in Southafrica boasting about their BMWs bought them on contract – No one buys brand new cars on cash basis………Bring it on FNB!!!!!
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