NKWETO MFULA, Trade Fair, Ndola
THE Bank of Zambia (BoZ) has expressed concern over the high level of loan defaults, resulting in commercial banks
struggling to build up on their reserves.
BoZ deputy director of operations Bwalya Ng’andu said the level of non-performing loans affects the banks, as they cannot raise enough money to lend other stakeholders.
Dr Ng’andu, who was speaking last Friday during a BoZ press briefing at the 53rd Zambia International Trade Fair, called on the people to service their loans to enable banks to have money in their reserves.
He said the threshold for non-performing loans is 10 percent, but that it was slightly above the stipulated percentage.
“People should take obligation to pay back loans because banks struggle to find money,” Dr Ng’andu said.
He said the banks, which are borrowing at a high rate as opposed to generating money from loans to remain afloat in business, must be solid in terms of liquidity.
Dr Ng’andu said the introduction of the Post Insurance Bill will help to protect the banking industry.
“We are hopeful that in the course of this year, the Post Insurance Bill may be passed,” he said.
Meanwhile, Dr Ng’andu has called on the citizenry to make use of the insurance companies by insuring their various properties.
He said the insurance industry is there to protect people’s properties.
“Without insurance a person can lose out a property such as a house which may not be built again, but with insurance a person can be compensated,” he said.