Maravi

Businessmen rap commercial bank

Businessmen rap commercial bank
By CHIWOYU SINYANGWE

COMMERCIAL Banks last week came under fire from local entrepreneurs who accused them of preventing Zambia from benefiting from the Africa Growth Opportunity Act (AGOA). During a Breakfast Get Together meeting organised by the Zambia Chamber of Small and Medium Business Associations (ZCSMBA) at Taj Pamodzi Hotel in Lusaka, commercial banks were urged to be responsive to needs of local entrepreneurs. Joy Mwambazi, proprietor of Tianshi Distributors said her company in 2003 was offered a contract to supply hospital uniforms to the United States under AGOA but failed because Zambia National Commercial Bank (ZNCB), her bank by then, delayed to release US $27,000 to cover for shipping of raw material despite producing a letter of credit.

Mrs Mwambazi explained that Zambia's exports through the AGOA suffered because the deal her company clinched was a test project for the country's capability to fulfill contractual obligations. She said not only did Zambia lose the contract to a named country but her company was fined by the US based company who contracted them for failing to honour the contract. "ZNCB managers refused to approve only US $27,000 we needed to pay for the raw materials from Pakistan even when we had a letter of credit.

And this deal was our opener to AGOA and was worth US $100 thousand a month which was to run for 3 years with direct employment of 50 other entrepreneurs who in turn would have employed other people. Now the container for raw materials was diverted to Lesotho and as I speak that country is benefiting from AGOA at our expense," Mrs Mwambazi said. And ZCSMBA executive secretary Maxwell Sichula who confirmed the incident expressed disappointment at the failure of most commercial banks to support growth of local entrepreneurs.

Mr Sichula called for reform in the manner commercial banks disbursed funds to his members to enable them contribute to poverty alleviation, creation of wealth and employment in the country. He explained that his organisation fought so hard for the AGOA deal to the extent of 'camping' at the office of Commerce, Trade and Industry permanent secretary, Davison Chilipamushi, who is also ZNCB board chairman , but lamented that by the time the bank's managing director, Mr Likolo Ndalamei authorised the release of the money it was too late. "Joy's case is not the only one, we have so many cases were banks are just proving difficult to help our member improve their businesses despite banking with these same banks. Right now we are also pursuing another case with Barclays Bank about our member who is a glycerine manufacturer and needs money to expand his business," Mr Sichula said.

Another participant Steady Sinkala, proprietor of Stechas Financial Services who labelled commercial bank managers as 'mere front-line staffs' said most managers in commercial banks did not have power to sanction the release of funds to their clients but failed to tell their clients the truth.

But ZANACO manager for marketing and product development Levy Nkoya who apologised for his bank's inefficiency in the failed AGOA deal called for harmonisation of operations between ZCSMBA with banks to avoid similar disappointments in future. Mr Nkoya explained the decision to only the release funds upon the approval of managing director was in line with new banking practices approved by Bank of Zambia claiming that in past some bank managers had abused that privilege.

Stanbic Bank manager for business banking David Katepa also offered the same explanation and urged the meeting to form alliances such as ZCSMBA saying sometimes banks found it riskier to deal directly with individual entrepreneurs who he said some had in the past abused loan facilities.

Labels: BANKING, SMEs, ZANACO, ZCSMBA, ZNCB

posted by MrK @ 8:11 PM