BoZ takes over Graypages

GRAYPAGES Financial Solutions Limited has ceased trading after the Bank of Zambia (BoZ) took over its operations to address the weakening financial performance and condition of the institution.
“BoZ has taken possession of Graypages Financial Solutions Limited with immediate effect. The decision to take possession of Graypages Financial Solutions Limited has been taken to provide for its orderly exit from the financial system. Regrettably, the institution has remained under-capitalised,” the central bank says in a statement.
The decision was effected on February 4.
The BoZ’s possession of Graypages is in line with the banking and financial services regulations. The central bank is mandated under the law to regulate and supervise the operations of commercial banks and non-bank financial institutions.
According to the BoZ statement, Graypages will continue business operations on a restricted basis under a manager appointed by the central bank.
BoZ says it has been engaging stakeholders and Graypage’s board of directors to resolve the deteriorating financial performance and condition of the company but no improvement has been made.
During this period Graypages will be under possession while the BoZ will prepare a statement of affairs and take any other action it deems fit.
Recently, the Association of Microfinance Institutions of Zambia (AIMZ) noted that the decision by BoZ to limit interest rates that licenced non-banking financial institutions can charge customers has had a negative effect on the operations of micro-financial institutions in the country.
In 2013, the BoZ introduced a cap on the effective annual lending interest rates that licence non-bank financial institutions can charge customers to make borrowing more affordable and equitable especially to the vulnerable micro-borrowers served by the sector.

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