Relax lending terms, banks urged

the slow economic resurgence.
Industry and Commerce Minister Welshman Professor 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 added that if the financial institutions could relax their lending rates they could 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,” Prof Ncube said.
Financial institutions that recorded healthy financial reports include CBZ, which posted a US$30,3 million profit in 2011, up from US$18,8 million recorded in 2010.
NMB managed to also increase its profits to US$11,9 million up from US$6,8 million realised in 2010, while Stanbic had US$11 million in 2011 up from US$7,7 million recorded in 2010.
Meanwhile, the Bankers’ Association of Zimbababwe has defended the interest rates saying they were in line with regional trends.
BAZ president Mr John Mushayavanhu said rates levied by the local banks were comparable to the region, although they differ slightly due to 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 added that local bank charges were better considering that in other countries, such as South Africa, banks even charged their clients for depositing money, which does not happen in the local banking sector.
Government recently launched the Industrial Development and National Trade Policies which are expected to steer the economy for the next four years in line with the country’s vision to realise sustainable economic growth. — New Ziana.