Sat, 24 Feb 2018 10:02:39 +0000
By BUUMBA CHIMBULU
THE level of non-performing loans (NPLs) has currently increased beyond normal threshold of 10 percent, thereby affecting efforts to reduce interest rates, says Bankers Association of Zambia (BAZ).
Currently, the level of the NPLSs has increased to 12.0 percent from the normal threshold of 10.0 percent, representing an increment of 2 percent.
According to BAZ public relations officer, Mirriam Zimba, the current level of NPLs were beyond acceptable to industry threshold as they held on effect on the anticipated downward push for interest rates.
Ms. Zimba however observed that the current measures put in place by the Bank of Zambia, commercial banks would start unwinding interest rates and scale up credit extension to support productive sectors of the economy.
She said such development would also have a positive impact on the livelihoods of Zambian in line with the aspirations of the Seventh National Development Plan and the Vision 2030.
“The Bankers Association of Zambia also do recognise Government efforts in achieving fiscal consolidation targets, which were below the programmed levels as at June, 2017,
“As highlighted in the Monetary Policy statement which indicated that preliminary budget deficits on a cash basis was at 6.1 percent of the Gross Domestic Product, which is still below the 2017 budget target of 7.0 percent,” she said.
Ms. Zimba further said “a balanced fiscal and monetary policy framework is key in stabilising inflation, which now stands at 6.1 percent, the exchange rate which has stabilised at around K10 to USD $1, and interest rates which are now expected to go below the average of 24.6 percent as at end of 2017.”