UPND leader Hakainde Hichilema has said that the POLICY rate recently introduced by the Bank of Zambia (BOZ) has failed to have a significant positive effect on the commercial banks interest rates.
Mr. Hichilema has observed that it is pointless to have the monetary policy rate that is not adding any value to the reduction of the cost of borrowing money in the country.
The opposition leader said that the PF government does not seem to have economic policies that will translate into real economic gains.
He added that majority of the people in Zambia depend on the micro-finance services which have the interest rates standing at 60 percent.
Mr. Hichilema was speaking to QFM News.
On Friday, the central Bank announced that it has maintained base rate at 9 percent.
The base rate is a mechanism that guides commercial banks as they try to come up with interest rates.
QFM
OK under 5
I thought interest rates came down as a result of this? Which bank does HH go to that has interest rates at 60% ? What are UPNDs economic policies. We want to know them other than all the time opposing everything that the PF does including minimum wage.
yes he can oppose,because CNP have no direction. HH go ahead and tell them this foolish people with there satana king cobra.
i agree with you here Mr. HH. an ordinary person cannot get a loan from the bank because the cost of borrowing is high. i was just doing my business plan last month but am scared to borrow because i might lose my house if i fail to pay. only workers in formal employment are given loans making them destitute in the long run. we need good capital market which is affordable and easily accessed that can drive SMEs and that is how meaningful employment will be created
@KCI micro finances are institutions such as bayport, micrifin, finca,meanwood and these small money lenders. its true they charge about 50-60% he is not talking about commercial banks whose interest rates is between 21-30 %
Institutions like Izwe Loans, Bayport and the like really need to be helped to lower their lending rates. I wanna ask you a question, Is it reasonable for anyone to expect changes overnight on big policy shifts as the one under discussion? I really find it strange sometimes. I hope our politicians can get to a level where they give advise and not only complain and condemn
HH is very sharp..this is very true.he has just opened the PF government on this issue. majority of zambians borrow from micro finaces and not banks…….HH is now selling out the UPND secretly to help CNP government. HH is too sharp people he is very very right on this issue which CNP government cannot see at all.
The Micro finance institutions are just thieves; I stopped going there
To support economic activity in the country the PF Government has introduced a combination of reductions in the statutory reserve ratio, the core liquid asset ratio, the corporate tax rate for banks and the Bank of Zambia Policy Rate to induce a reduction in commercial banks’ lending rates to an average of 16.6% in August 2012 from 26.3% in November 2011. This HH bitter, jealous chap is truly clueless.Interest rates were as high as 26% just last year and obviously the policy rate has just been introduced for the past 4 months does he expect it to immediately go to 12% which is where it headed. This sour grapes tribalist knows he is headed nowhere, he knows PF is here for the next 20 years.
Its clear HH is taking about micro-finance lending around 60% plus. If you understand the banking industry you would not even ask which bank HH goes to. You would ask a more inteligent question. Policy rate is a joke bcoz banks lend at policy rate plus xx% which brings the interest rates for borrowing back to the range of 18% to 27%. There is no difference. Tell us which bank is lending cheaply. The cost of borrowing it extremely high in this country. There is no meaningful step govt or boz have made to address the issue of high interest rates. HH is right.Â
I am disappointed that HH as an economist can come up with such a shallow analysis. He forgets that the base rate is simply the rate at which BoZ will lend to its most reliable customers, and even then most banks will only borrow from BoZ if the inter-bank structure is not convenient for them. Determination of lending rates while affected by the base rate is affected by many other factors, such as inflation, the ratio on no-performing loans, credit risk and even the shareholders demand for returns on investment.
As the BoZ itself noted in a 2010 report, interest targeting is difficult in the Zambian banking scene as determination of lending rates by banks involves a motley of quantitative and qualitative considerations, and the base rate is just one of them.
Ba guy read again before u disappoint others…
your analysis is pathetic dont show your ignorance in public
HH is an unrepentant trribalist bitter jealous liar.
Verbal diarrhea! He just wants to criticize everything!
ba pf vuvuzels hh is right
Cry baby!!!!!!!!!!!!!!!!!!! everyday crying without giving alternatives,what would u do given that you were the one in power. Thai is what to hear from you, dont just discount for the sake of it,because at the end of the day you come out stupid.
zmabians do not be shallow minded. those criticizing HH should read the article again. Most of you would fail comprehension test on the article. “He added that majority of the people in Zambia depend on the micro-finance services which have the interest rates standing at 60 percent.” This is the jist of the argument.
Iam beggening to like HH everyday the guy speaks sense , no wonder people advocated for a degree holder to be president, I know many PF fools here may not understand HH analysis, well letme Putin simple language. What HH is saying is Your family Teachers, nurses , police etc can’t get loans from the banks as they don’t have any collateral so they will go and get a loan from bayport, finca,microfin who charges up to 60% interest .9% borrowing rate PF talk about it a lie, banks will compound a cost for insurance against such a loan before you know it , it will be 27 to 32% repayment so HH is 100% correct the guy is just too smart
Thats untrue you dunder head. Did you know that all government workers are being offered cheaper and long term based loans? Go to HH and try to get a loan and see whether he will give you without asking for collateral.
Bauze
Boot leaker don’t lie my cousin a nurse got a k25 million loan from Zanaco by the time she finishes she will pay Zanaco k49 million if in your Brian that represent 9% repayment am scared and worried, if you don’t provide a collateral all commercial banks issue what are known as insured or secured loans tocover for loss so an insurance premium will apply on that loan . So plz don’t show yo ignorance here
This is cheap intelligent politicking. You can say that the commercial rates are not being affected but THAT CAN ONLY BE TRUE IF YOU COMPARED THE “WITH 9%” AND “WITHOUT 9%” SCENARIOs. HH is not doing that.
I want to think that the “without 9%” scenario should have seen esclated commercial rates higher than the current rates. Therefore, the “with 9%” scenario is a policy scenario that holds the rates at the same rates before. This is what I want to believe given that PF have not been doing much. I conclude and side with the technocrats that the 9% policy rate has effect.
HH is sour grapes, I don’t think he can a good leader cos hes full of bitterness.He has nothing to offer to the people of Zambia.
The man is like this guy who has never tried football and keep on condemning footballers and when told to kick the ball he instead kicks his asss and sucker balls. That is HH for you.Â
@Kci
just like CNP,this language HH is using is beyond your comprehension.HH is saying that the majority of poor zambians depend on micro finance institutions for loans whose interest rates are above the roof.iwe nokoh ichinyoh out of malice you go ask which bank HH go to.
micro finance institution ne bank nafipalana stanyokoh?
Issue based politics. so lets stick to the argument here and stop bringing other unrelated materials.Those that have brains and the know please can you agree or disagree.These are national issues we need to debate on without rushing to blame people
HH is missing the point if he has to merely criticise everything and every time, interest rates in commercial Banks reduced to as low as 11% for some Banks from over 20%! Why should most Zambians go to microfinance institutions, those are for short term loans, payable on 30th of each month!!
sometimes its better to keep quite than to expose your ignorance in public. microfinance institutions are not those kaloba arrangements where you promise to pay at month end. trhey can lend for up to five years. i beg to agree with most hear who say HH is a class above these negative thinking zambians who want to comment on what they dont understand simply because it is critical to their grandpas’ ideals. interest rates in MFIs remain very high and that is the source of borrowing for most zambians. when you talk of interest rates falling to 11%, remember thats base rate. go try borrow and you will find you are borrowing at 20 or 23 percent still. wake up haters!
Please do not borrow for consumption. If you borrow so that it helps you make money then go for it. The problem is people want to borrow so that they consume today and pay back tomorrow. Banks consider risks, one of which is the records of previous borrowings. The banks are small to take long term risks and thus the high rates. Thats why big investments are done elsewhere. You dont expect to get benefits of the monetary policy in few months, some decisions being implemented today were planned for last year. We need leaders with a macro and not micro perspective.
Just address the issue if you know more about economics and bank operations.It shouldnt matter who says it.The best answer is for the good of the nation
Its true what HH is saying… I work in a bank and what we charge is BOZ policy rate plus a margin… So since the rate is now at 9%, we have been massively increasing the margin so as to remain with a high rate  for more profits for our bank…. If BOZ policy rate goes below 9%, we shall still increase the margin to protect our profits from interest income..
Self-appointed commentator. Knows everything, what a negative self- image!
But my friend who works for a Bank told me that interest rate is between 10 and 15% . Has HH found out what the Banks are charging? He would have said about the interest rates the banks are charging in Zambia before negating the base rate of Bank of Zambia. Again HH, talks of the micro financing tuntemba instead of Banks. This lack of analysis capacity makes him appear so dull every time he oppens his mouth.
I am starting to like HH’s bitterness!!This guy is a marvel to watch..I do not know where i was looking last tym to vote 4 CNP.I have made my change..bye ba pama fi
Complaint as usual!!! whats your suggestion Mr. HH
@Mulahu,its you who is dulll. if you do not understand issues its better you keep quiet.The purpose of introducing the policy rate by BoZ is the indicative rate at which banks should charge on thier loans…At 9% policy rate,it does not make sense for banks to continue pegging thier interest rates between 15-30%.
Rates between 10-15% would make sense for banks as the extra 5% will take care of inflationary risk and credit risk like you put it.Please take a simple course in economics or accounts if you have to appreciate what HH is saying….MALABISHI.
I understand HH is in opposition. But what i do not understand is his opposition without counter proposition. Criticize and offer alternative and progressive views and pespective. All the time HH is in the headlines its criticism after criticism. Only HH can do things better others can not? Only HH ca rule zambia others can not? Please HH give chance to the ruling Party and your chance will come.Â
You will need to ask HH what he would do in the circumstances NOT to expect him to start proposing what PF should do. he is not in gvt to advise pf and neither is he a gvt advisor