THE Government will recapitalise financial institutions to enable them sustain the crusade of lowering the cost of borrowing money by the business sector, Finance Minister Alexander Chikwanda has said.
Mr Chikwanda said Government would recapitalise financial institutions to desirable levels as a way of moving the economy forward and ensuring that measures were taken to lower costs of borrowing money in Zambia.
Speaking in Nakonde during the official opening of the 65th Zanaco branch at the weekend, the Finance minister said the low levels of development in Zambia and Africa, originated from the absence of institutions which promoted growth at bearable costs.
“We will recapitalise the financial institutions under the ambit of Government to desirable levels to sustain the crusade to lower the cost of money as a way to move the economy forward,” he said.
Mr Chikwanda added that banks in developed countries had structured interest rates to a minimal level, in order to provide stimuli for recovery from recessions.
He added that high interest rates had hindered development in Zambia and that the prevailing exorbitant interest rates in the country resulted in high cost of the economy and “chocks” development by making the cost of capital prohibitive and out of reach of people.
Mr Chikwanda said commercial banks played an important role in the development of the country’s economy.
He also revealed that the public service micro finance outfit which was a prelude to banks would soon begin to lend at rates not more than five per cent.
The minister encouraged the banking and financial services sector to embark on client sensitisation on Statutory Instrument (SI) number 32 which was aimed at monitoring balance of payments (BoP).
“The public should also be made aware that there is a compelling need to ensure that information, communication and technology systems are robust, reliable and have strong security features to ensure safe transfer of funds and protection from exposure to crime which may arise through manipulation of computer transactions,” Mr Chikwanda said.
He applauded Zanaco for opening the Nakonde branch describing the move as a way forward in Zambia’s development efforts which needed to be intensified in order to make and sustain a concerted attack on poverty.
Speaking at the same function, the bank’s vice-chairperson Chintu Mulendema said positioning the Zanaco branch in Nakonde would help increase access to financial services in the rural community.
He said the branch in Nakonde, would help address the banking needs of the increasing border traffic.
Mr Mulendema said Nakonde which has the third highest volume of border trading, attracted a promising active economy.
Zanaco would continue to strengthen relationship with Government and the Zambia Revenue Authority (ZRA), through essential business initiatives such as e-banking activities.
“In all our border locations, our relationship with ZRA and the Government continues to prosper through essential business initiatives particularly e-banking activities saving business men and women time and money,” he said.
Mr Mulendema said Zanaco focused on small scale farmers through products like “Cultiv 8″ which offers farmers the ability to banking with mobile phones whilst receiving relevant farming information.
“Partnership such as this mean that we can ensure financial inclusion for more Zambians,” Mr Mulendema said.
Mr Chikwanda said there was a need for small-scale farmers to increase production yields through better agronomy.
He said there was need to provide finance and enhanced extension services to small scale farmers in order to create gainful employment for Zambians.
Source: Times Of Zambia