Zambia: ZUFIAW urges banks to lower interest rates

Jan 09, 2017

This will help borrowers access loans at affordable rates

Following the drop in inflation from more than 20 percent to 7.5 percent, the Zambia Union of Financial Institutions and Allied Workers (ZUFIAW) has called on various financial institutions to lower their interest rates. Since inflation has dropped significantly, the banks no longer have moral justification to keep interest rates high, the president of ZUFIAW stated in an interview. "The year 2017 should be a different year, we want workers and companies to enjoy the benefit of the drop in the inflation rate. We want them to borrow money at an affordable rate to enable them invest it in the economy, so it is immoral for banks to charge high interest rates," he said. Currently, interest rates in commercial banks are between 35 and 40 percent respectively; since inflation stands at single digit, lowering the interest rates become necessary so that borrowers can access loans at affordable rates.