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BOZ STIMULUS PACKAGE LURES K10.5BN APPLICATIONS

By BUUMBA CHIMBULU in Kabwe
THE Bank of Zambia (BoZ) has received applications worth K10.5 billion from both banks and non-banks interested in accessing the relief facility.

BoZ has therefore indicated that it is currently determining whether or not the K10bn facility is adequate to support the economy.

The central bank in April last year put in place the K10bn Targeted Medium Term Refinancing Facility to assist with liquidity to businesses and individuals during the Covid-19 period.

As at May 31, 2021, the BoZ had received applications worth over K10.5bn.

BoZ Assistant Director Financial Market Stability Unit, Goodson Kataya,  said as at May 31, 2021 the bank received 50 applications of which 20 were from commercial banks and 30 from non banking financial institutions (NBFIs).

“The total value of applications received thus far stand at K10.5bn.  Of the 50 applications, 23 have been approved representing about 84.1 percent of the value applied for.  Eleven of these approved applications are from commercial banks and the rest are from NBFI,” Mr Kataya said in an interview.

He also said K6.1bn had been disbursed to 21 financial services providers out of the K10bn stimulus fund as at May 31, 2021.

Mr Kataya explained that most of the funds had gone to priority sectors at about K5.3bn while K3.4bn to non-priority sectors.

He stated that 49, 093 clients had also benefitted from the facility, comprising mostly individuals and households.

Meanwhile, Mr Kataya said the BoZ was currently determining whether or not the K10bn facility was adequate to support the economy through the financial system.

He explained that in an event that there was still demand from the financial service providers for funds once the facility was exhausted, the BoZ would need to determine the way forward.

“So at that point when we do the evaluation, it will be decided as to whether we need to put in more, and how much should be put in at that point. As it is now, we are trying to see if the K10bn will be adequate and if indeed we will navigate through the crisis.

“At that point when it is exhausted, we will need to make a determination and do an evaluation. Then we will see if we still need to support the economy or not,” Mr Kataya said.

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