Business

Investrust expects drop in interest rates

NKOLE MULAMBIA, Ndola
INVESTRUST Bank Plc has projected that interest rates are generally likely to significantly drop from around 30 percent by half this year due to positive macroeconomic fundamentals and measures taken by the central bank.

Bank managing director Simangolwa Shakalima said macroeconomic fundamentals look positive.
This year, the central bank has on two incidents reduced the monetary policy rate and statutory reserve ratio, which now stand at 12.5 percent and 15.5 percent respectively.
The country has seen macroeconomic fundamentals such as inflation rate reducing below seven percent and Kwacha firming below K10 range.
“We project a steady reduction in interest rates of between 14 and 17 percent due to positive macroeconomic fundamentals and the implementation of certain measures by the central bank.
“Four years ago, the economy experienced interest rates ranging between 14 to 17 percent and are headed towards a similar direction,” Mr Shakalima said at the just-ended 53rd Zambia International Trade Fair.
He is optimistic about the future saying, “Obviously average lending rates have come down and with more liquidity on the market as a result of Bank of Zambia implementing certain measures, this will help going forward.
Mr Shakalima cited default rates and the cost of money as some of the factors that go into determining the interest rates.
“Certain institutions and individuals have a tendency of not paying back money from the day they borrow and this affects the performance of the sector,” he said.
And the bank, which has already identified 500 banking agencies, is targeting to recruit 1,500 agencies across the country following the introduction of agency banking.
This is in its strategy to move away from the tradition of setting up branches as it is costly.
Mr Shakalima said the bank is seeking entrepreneurs that are liquid, like filling stations and supermarkets, to become agencies that will allow consumers to open accounts, make withdrawal and deposits without going to a branch.

 

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