Government has registered a micro finance institution which will be charged with the responsibility of disbursing affordable credit to public service workers at a lending rate not exceeding 5 percent.
Finance minister Alexander Chikwanda disclosed this when he officially opened the National Servings and Credit Bank Chavuma Branch in Chavuma today.
Mr. Chikwanda explained that the public service micro finance institution which will be operational soon is meant to trigger a downward movement in interest rates.
He said the innovation is in response to some private micros finance institutions that have formed curtails to manipulate the cost of banking services and credits thereby making abnormal profits.
Mr. Chikwanda explained that access to financial services is a major driver to the economic development for any district.
He said the opening of Natsave Bank is a major development to Chavuma as it is the first banking service since the establishment of the district in 1997.
Mr. Chikwanda also revealed that government through the ministry of finance has released KR 150 million for various developmental projects in North-Western Province.
He named some of the projects to be undertaken as the completion of the Solwezi general hospital, upgrading of roads in Mwinilunga and Solwezi, construction of office blocks in Ikelenge and Chavuma among others.
And Bank of Zambia (BOZ) Governor Michael Gondwe stated that it was unfortunate that micro finance institutions have for a long period of time concentrated only along the line of rail.
Dr. Gondwe said the trend has disadvantaged many people living in rural areas as it is hard for them to access financial services.
He urged micro finance institutions to open more branches in rural districts if financial inclusion is to be achieved
Meanwhile, NATSAVE Board chairperson Chiselembwe Ngandwe said the bank will remain a significant development catalyst in the district.
Mr. Ngandwe also disclosed that plans are underway to open more branches in rural districts countrywide in order to ensure that its mandate of taking developmental to rural areas is achieved.
ZANIS
All characters fictious!!!!
My beloved Zambia; yo! This certainly is a positive development for the civil servants in rural areas who have had to borrow at unreasonable interest rates. My worrie though is the type of policy this PF Government wants to adopt. Are we moving away from a free market economy? First, they introduced a prime rate for micro finance institutions & i thought that was the solution to the high interest rates. Now they want to kill the micro finance business completely by participating in a very unfair way. Micro finance institutions use borrowed funds to lend to it’s clients; this Govt micro finance will use tax payers money to lend at 5%. can this be fair mwe Bantu? What about the employees who will be laid off? What employment creation is happening here? We are going back to UNIP days.
So its okay for civil servants to be rippedoff so that we create a few private sector jobs?
Man this is for civil servants only. They are the people who cant afford borowing from micro finances coz they are poor workers. Great news for civil servants indeed.
Better a fair deal than have people continue stealing from civil servants … Employment creation when they make ‘abnormal profits’ and pay their workers very little!?
Welldone Mr Chikwanda, we are tired of the same MMD policies which has failed to bring down levels of poverty in our Country. Always talking about free market economy with no tangible positive results is a waste of time. Better with a mixed kind economy than stick to this system while people are suffering. Kill those fake micro finance and let them go where they belong. Most of them even the people they have employed are suffering despite them making alot of money. I have a friend who was working for one of them but was complaining of poor salaries each time u meet. He resigned and started a construction company using the Mooney he borrowed from his brother. He is now happy even building his house.
NATSAVE has been doing this all along, the rate were already at 5% some six years ago when I had an account with the bank. So there is nothing new that the PF has in relation with the bank NATSAVE only that they have opened a new branch, that is all. And it is good.
well done mr chikwanda? why are we zambians so gullible to the extent that it hurts kanshi? you put it middlemen microlenders who in the first place will win contracts through connections and kickbacks and once they get the contracts its free for all because we have no regulatory systems in zambia,,,, even in the usa they are still struggling with these institutions after putting in regulatory bodies. its just the nature of humans…. inherently corrupt
Katwishi, it only applies to civil servants..
A welcome move. However, Just ensure that credit collection mechanism is effective. In as much as you will help them, some will end up as preditors of loans. They can change pay points and confuse the debt collection mechanism. If repayment is through banks you end up with bad debts to be written off. On the other hand some loan clients, the civil servants may end up paying back without stopping. Sometimes govt mechanisms may end up disadvantaging people. An example is pension scheme and how it inefficiently runs. Managing money matters at micro level can be a very daunting task. Money is always a big issues in our lives.
Pitwell; most micro finance institutions lend to civil servants. Private sector employees borrow from banks rather than mico finance institutions. Government employees are targeted because the Ministry of Finance provides a deduction code for civil servants which guarantees recoveries from the employees. Private sector employers and am one of them; do not guarantee such deductions and off course we know that the interest rates are exorbitant. Kwekwe; I would be happy if the Govt would come out as clear as you have that we no longer subscribe to a free market economy. We would not be surprised by such actions.
Ba Katwishi,
In a way this move would also benefit you, by reducing the demand for loans from established mirco finance groups. This move will reduce the market for loans and the micro finance groups will have no choice but reduce rates and become flexible to capture people like yourselves.
In short, the micro finance groups are offshoots of the banks, the banks can lend them at high rates which inturn is passed onto ordinary citizens. In short the banks are collecting interest rates of 20percent.
The government should securitize the many informal people to be able to get loans with recourse assured to lending institutions. If not we are going to make money for REPATRIATION. The evidence is there for all to see. All the hype in the economic activity but very little personal…
That is positive thinking from our leader, he is basically stepping up the game to empower local citizens. In Human Resources, it can work as a retention tools to govt employees who are on rampage leaving the country for the perceived greener pastures. The question now is what about the private sector?
Let them do the same with the big banks as well, why not BOZ, ZANACO and other banks, belatubepa, this bank has been operational for sometime and this just a new branch, Period.
Chikwanda should be income PF President in case of a presidential bye election. I am told someone at State House is on sick bay mwebantu
It is not sustainable to offer interest rates below inflation.
THIS IS VERY GOOD INITIATIVE BY THE GOVERNMENT. DEFINITELY, INTEREST RATES WILL BE DRIVEN DOWN IN OTHER COMMERCIAL BANKS AS THE NUMBER OF THESE NATSAVES GROW. WELL DONE PF GRZ
Well done. The people who serve the public deserve support and respect.
If they are talking about NATSAVE then it is not only for public workers. I am not a public worker but I enjoyed the services of NATSAVE together with marketeers, unless you are saying they have changed. NATSAVE was the first bank to accommodate the women selling tomatoes and vegetables. I am afraid the minister does not know about NTSAVE. He just want to create the impression that it is the PF making, no we are all involved and they will not lie to us.
awesome
Good move PF. Empower the civil sufferers. Let them get loans at affordable rates. Great move indeed. Leave hose born frustrated and bitter to continue hating and ranting while Zambia moves on.
Peace and Prosperity to Mother Zambia.
i hope commecial banks will son follow suit..ba chilamo uku sacking utuma salary twesu with there exorbitant lending rates.imagine some were going at 28% !
more money in our pockets, well done PF.shame on you some private microfinance who are charging 90% interest .
oh yes! what a great news for civil servants. The govt will be using tax payers money which is mostly derived from the same civil servants hence the need to help them access cheaper loans . We love you mr chikwanda,keep it up?
public service only applies to civil servants?
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