Zambia: Revisit Depositors' Interest Rates - Chikwanda

FINANCE Minister Alexander Chikwanda has urged commercial banks in Zambia to increase interest for depositors.

The minister said the move was meant to curb the current mismatch of rates banks charged borrowers and interest offered to depositors.

Mr Chikwanda was speaking in Choma yesterday at the official opening of an Investrust branch.

He described the mismatch as a disincentive to depositors and that it militated against the expansion of banking services.

Banks, he said, played an important role in national development as they were institutional mechanisms for mobilising capital and channeling capital enterprises.

"In this process the terms, which is the interest rates at which the money is dispensed cannot be a matter of indifference because the cost of money determines various other costs in the economy. This is the principal consideration of Government assigning prominent consideration to seeing a drastic reduction in interest rates," he said.

The minister commended Investrust's expansion strategy and its growth, saying it had blossomed at a robust pace with its operations and financial performance showing an upward swing.

Investrust's total assets increased from K419 million in 2007 to K1.3 billion as at December 31, last year.

"The bank from inception has operated on an adequate capital structure and will strive to meet the revised capital requirement set by the Central Bank in the expected time frame," he said.

Investrust Bank managing director Friday Ndhlovu said his organisation's short-term strategy was to be in all provincial centres and improve on the saving culture of the majority Zambians.

Mr Ndlovu said the bank invested about K3.5 million for the opening of the branch and that the bank would continue to be more innovative and work in line with international banking standards.

Mr Ndhlovu said the bank had special products for the people of Choma, and would ensure that it fully supported the agriculture and livestock sectors.

To this effect the bank donated K10,000 for the purchase of dip tank chemicals in an effort to boost the livestock sub-sector in the"Opening of the Choma branch will surely complement Governments efforts to create jobs for ordinary Zambians, a major component of Government's resolve to improve lives of citizens," he said.

The bank also awarded its first customer at Choma branch, with a heifer.

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