Maravi

NatSave collects K23bn from rural farmers for 2009 ISP

NatSave collects K23bn from rural farmers for 2009 ISP
By Mutale Kapekele and Fridah Zinyama
Tue 02 Nov. 2010, 03:59 CAT

THE National Savings and Credit Bank (NatSave) has collected K23 billion from rural farmers for last year’s Input Support Programme (ISP). Natsave board chairman Frank Ng’ambi disclosed this on Saturday at the commemoration of the World Savings Day, which was observed in Zambia for the first time.

Ng’ambi also disclosed that his bank had paid out K74 billion to farmers in remote areas on behalf of the Food Reserve Agency (FRA) since the beginning of the maize marketing season.

“We collected over K23 billion on behalf of the Farmer Input Support Programme for 2009, under the ministry of agriculture and cooperative,” he said. “We have also paid out over K74 billion on behalf of the FRA to both banked and unbanked farmers.”

He said his bank was still concerned with the low rate of financial inclusion in the country especially in rural areas.

“We are still concerned at the low level of financial inclusion in the country, particularly in the rural areas. Therefore, our plans for branch network expansion are still active under the government’s rural finance program amounting to US$ 336, 000,” said Ng’ambi said.

“We still encourage our farmers to open savings accounts once the FRA has paid them instead of keeping money in their homes.”

And the Zambia Competition Commission (ZCC) has urged commercial banks to reduce the cost of savings.

In a statement to commemorate the World Savings Day, ZCC executive director Thula Kaira stated that consumer savings played a significant role in making available funds for trade and investment and could lead to a positive effect on economic growth, which had the potential to improve consumer welfare.

“However as a Commission, we are concerned that commercial banks have continued to charge high interest on borrowing and high bank charges that have a potential to erode consumer savings,” he noted.

Kaira observed that despite the reduction in the rate of inflation over the past few years, bank lending rates and bank charges remained high among several commercial banks.

“Our continued message to our financial service providers as we mark this important day is that there is need to reasonably reduce on bank lending rates,” he stated.

“Additionally, high bank charges, if not addressed have a negative impact of eroding consumer savings as well as consumer confidence in the financial sector.”

Kaira stated that the drop in the rate of inflation, currently standing at 7.3 per cent, should have an equal reduction in interest rates as opposed to the current scenario where commercial banks had only effected a cosmetic reduction in interest rates.

The Commission also welcomed the World Savings Day and encouraged all Zambian consumers to save money in official channels for future use.

World Savings Day was established on October 31, 1924 during the first International Savings Bank Congress in Italy with a view to highlight the role of savings to the worldwide public and its relevance to the economy and the individual.

Labels: BANKING, FRA, FRANK NG'AMBI, NATSAVE, WORLD SAVINGS DAY

posted by MrK @ 3:22 PM