COMMERCIAL banks lending has increased to K14,063 billion as at October 2012 from K11,868 billion in January this year representing 18.5 per cent growth due to reduced lending rates.
And the Bankers Association of Zambia (BAZ) has said the Zambian financial landscape remained buoyant supported by the favourable political and socio economic environment which has enabled the country to record positive and significant growth in 2012.
BAZ chairperson Friday Ndhlovu said the level of commercial banks local currency lending increased from K11,868 billion in January 2012 to K14,063 billion in October 2012 representing 18.5 per cent growth.
This is largely attributed to a reduction in commercial banks' lending rates where the weighted lending rate decreased from 23.3 per cent in January 2012 to 16.3 per cent in December 2012.
Mr Ndhlovu said the banking industry exceeded Government's five per cent target growth of Small and Medium Enterprises (SMEs) lending by 18.2 per cent.
In a statement issued in Lusaka, Mr Ndhlovu said banks' lending to SMEs increased from K435 billion in December 2010 to K1,245 billion in June 2012, while the average lending rate to SMEs reduced by 22.5 per cent from 24.6 per cent in December 2010 to 18.03 per cent in June 2012.
Mr Ndhlovu said the level of deposits in banks went up from K19,874 billion in January 2012 to K 22,842 billion in October 2012, representing 14.82 per cent growth.
"The largest component of the deposits is in current accounts. Foreign currency deposits reduced from US$1,568 million in January 2012 to US$1,442 million in October 2012.
The reduction in foreign currency deposits could be attributed to the effects of the Statutory Instrument (SI) number 33 of the Currency Transactions Act which came into effect in May 2012. The interest rates paid to depositors remained unchanged as the rates applicable in December 2011 were maintained in October 2012," Mr Ndhlovu said.
He said investor sentiment remained positive and was demonstrated through the successful issuance of the $750 million Sovereign Bond which was oversubscribed.