adminLending rates for local banks ranging between 15 percent and 50 percent are driving industry away from borrowing, a situation which is contributing to the slow economic resurgence.
Industry and Commerce Minister Welshman Ncube said banks should play a leading role in the current economic growth matrix by bailing out industry which is financially constrained.
“Banks might feel they have no obligation to provide loans to local firms but they should bear in mind that good performance of local industry will reap them good outcomes.
“Our local banks are restrictive. If they relax their lending terms it could boost industry which is not borrowing as the interest rates are too high,” he said.
He said if the financial institutions relaxed their lending rates they would still manage positively.
“Many banks realised profits in the 2011 financial year and the same is anticipated in 2012 and beyond.
“They should, however, revise their positions and extend long term loans to distressed companies,” Minister Ncube said.
Financial institutions which recorded healthy financial reports include CBZ which posted a $30,3 million profit in 2011 up from $18,8 million in 2010.
NMB managed to also increase its profits to $11,9 million up from $6,8 million realised in 2010, while Stanbic had $11 million in 2011 up from $7,7million recorded in 2010.
However, the Bankers Association of Zimbabwe (BAZ) defended the interest rates saying they were in line with regional trends.
BAZ president John Mushayavanhu said rates levied by the local banks were comparable to the region, although they differ slightly due to the high cost of utilities.
“I can confirm that our rates are very much comparable to the region, the slight differences are because our infrastructure and utilities such as power are too high,” he said.
He said local bank charges were better considering that other countries such as South Africa even charged their clients for depositing money which does not happen in the local banking sector. — New Ziana.
Online Reporter