Members of the main opposition Malawi Congress Party (MCP) and erstwhile ruling People's Party (PP) on Thursday walked out of the House in protest over moves by the ruling Democratic Progressive Party (DPP) to stop MCP member of Parliament (MP) for Dowa West Alexander Kusamba Dzonzi from moving an interest rate cap bill--officially known as Financial Services (Amendment).
Opposition MPs walk out of parliament.-Photo by Alfred Chauwa, Nyasa Times
The bill would put a cap on high bank interest rates commercial banks charge to borrowers.
Dzonzi was expected to move the private members' motion amid allegations that he turned down a K200 million bribe from commercial banks for him to drop the motion, an allegations Bankers Association of Malawi has vehemently rejected.
But as he was set to move the motion, Blantyre City Central MP, Themba Mkandawire (DPP) asked for standing orders to be waved to have government Ministers answer questions from legislators.
Thursdays are reserved for private members motion but DPP said it should be government business to answer questions first, effectively blocking Donzi from moving the motion to put limits on how much interest rates banks, microfinance institutions, accos and other lenders can put on loans.
Pandemonium broke out in Lilongwe, the seat of parliament, when House speaker ordered a division vote and the government benches said to have won. A shouting match began by MCP led by its Chief Whip Robin Lowe.
The PP legislators also trooped out.
The Bill's sponsor, Dzonzi, told Nyasa Times later that his MCP party walked out because it did not want to be party to proceeding sagainst the wishes of the people, arguing the proposed legislation will create a win-win situation between money owners and lenders.
"Malawians are watching and know that the government has been palm oiled to block the bill. DPP is denying Malawians the right to access lower lending and interest rates. We will still push for this bill back in the House, no matter when.
"Banks should not steal from Malawians. They pay themselves
when the owners of the funds are languishing," he said.
PP leader in parliament Ralph Mhone condemned DPP of "doing things against the interests of poor Malawians."
But inside the house the DPP MPs, buoyed on by its parliamentary alliance partners United Democrtaic Front (UDF) Mps, went ahead to have ministerial questions time.
The commercial banks, through the Bankers Association of Malawi and Reserve Bank of Malawi have been meeting the members of parliament, giving them brown envelops with K200 000 each in order to lobby them to reject the motion.
The Financial Services Amendment Bill seeks to regulate and regularize the setting up of a ceiling of interest rates charged by banks to a maximum of five per cent below the lending rate.
At the moment, banks are squeezing growth of industries because of exorbitant rates charged forcing companies not to borrow which squeezes growth.
But Paul Guta of the Bankers Association of Malawi said the bill is aimed at killing the banking sector in the country.
"In Malawi, banks are already operating in volatile financial environment. If this is passed into law, some banks would collapse," he said.
But Consumers Association of Malawi (Cama) as well as audit and corporate governance expert Anthony Mukumbwa backed the bill, pointing out that banks are squeezing the growth of industries because of exorbitant interest rates charged, forcing companies not to borrow, which squeezes growth.