Micro Finance Service Providers’s lending interest rate capped at 42% by Bank of Zambia
Time Posted: January 3, 2013 6:14 pm
The Bank of Zambia has with immediate effect introduced a cap on the effective annual lending interest rates that licensed non-bank financial institutions can charge their customers. This follows similar recent measures taken on commercial banks by the central bank.
Bank of Zambia Head of Public Relations Kanguya Mayondi in a statement released to media said that this measure has been necessitated on account of
the exorbitant interest rates that some non-bank financial institutions have continued to charge their customers.
Mr Mayondi explained that the capping of interest rates is aimed at making borrowing from non-bank financial institutions more affordable and equitable especially to the vulnerable micro-borrowers served by this sector.
He said that as a consequence, the maximum effective annual lending interest rate for non-bank financial institutions designated as microfinance service providers by the Bank of Zambia shall not exceed 42%.
He said that consequently, the Bank will designate non-bank financial institutions qualifying under this measure.
Mr Mayondi added that the maximum effective annual lending rate that will be charged by all other non-bank financial institutions will not exceed 30%.
He said that the interest caps of 42% and 30% have been arrived at by multiplying the commercial bank maximum effective annual lending interest rate, which currently stands at 18.25%, by factors of 2.302 and 1.644, respectively.
He stated that the Bank of Zambia will periodically revise the factors applicable to the non-bank financial institutions interest caps, in response to changes in economic fundamentals and the commercial bank rate.
Mr Mayondi further added that the conditions will apply to new loans written, while existing loans will be allowed to run their course on the current terms unless refinanced.
Meanwhile the Bank of Zambia has directed commercial banks and business entities to accept cheques issued prior to 1st January 2013 in the old currency.
Head of Public Relations Kanguya Mayondi said that the central bank has received reports that certain business entities and some commercial banks are turning away customers holding cheques prior to 1st January 2013 in the old currency.
Mr Mayondi said that cheques issued prior to 1st January 2013 in the old currency are just as good and should accordingly be accepted and processed.
He reminded all business entities and commercial banks that the cheques have a validity period of six months and therefore cannot be deemed to be invalid because of the currency rebasing exercise.
Mr Mayondi said that Cheques, therefore, should be accepted accordingly as they will be processed through the banking system by dividing the amounts by 1,000 to convert the values into the rebased currency.
He said that the Bank of Zambia, in this regard, wishes to remind all business entities and commercial banks that cheques issued prior to 1st January 2013 and in the old currency must be recognized and accepted as payment in order to ensure that well-meaning customers are not inconvenienced.
Labels: BANKING, KANGUYA MAYONDI, LENDING RATES, MICRO-FINANCE
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BOZ does not owe Musokotwane any benefits-Mayondi
TIME PUBLISHED - Thursday, December 15, 2011, 9:10 am
Bank of Zambia has said that it was unaware of any retirement benefits due to the former Minister of Finance and National Planning, Situmbeko Musokotwane. This is according to BoZ head of public relations Kanguya Mayondi.
This follows allegations by President Sata recently that Dr Musokotwane was receiving two salaries after he left the bank to become secretary to the treasury and later economic advisor at State House.
Dr Musokotwane said when he was hired as a consultant by the bank to provide certain services, he did not get any remuneration from Government as an economic advisor at State House.
He challenged Government to countercheck the payrolls at the bank and Government to verify if at one point he got double salaries.
It was alleged that Dr Musokotwane stands to pocket up to several billions in retirement packages from the government through the Bank of Zambia (BoZ) where he once served as a deputy governor.
But the bank, in a response to a press query, yesterday stated that it does not owe Dr Musokotwane any benefits.
“The Bank of Zambia wishes to state that it is not aware of any payments which are due to the former Minister of Finance and National Planning, Dr Situmbeko Musokotwane.
“The Bank of Zambia further wishes to urge you to contact Dr Musokotwane directly for any further information,” Mr Mayondi said.
Labels: BOZ, KANGUYA MAYONDI, SITUMBEKO MUSOKOTWANE
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BOZ takes over Finance Bank, fires directors
By LusakaTimes
Friday, December 10, 2010, 18:59
Bank of Zambia (BoZ) has taken over operations of embattled Finance Bank Zambia limited. The Central Banks says this is pursuant to the Bankers Act81. (1) (c) (i) and (ii) of the laws of Zambia meant to protect the institution from further damage created by its shareholders, directors and senior managers.
BoZ says the, directors and shareholders of the bank had failed to comply with the law on good governance and management practices. BoZ says if it did not move in to take control of the institution the bank’s liabilities would have affected other stakeholders in the financial sector.
The Central Bank said it would ensure stability in the banking sector and that operations at Finance Bank would continue to run smoothly without disruptions.
And BoZ has since appointed Leonard Hanze as acting chief executive officer with immediate effect.
This follows the removal of the chief executive officer, managing director, executive director Special Projects, executive director Finance and credits and executive director Corporate Banking and Marketing.
Others relieved of their duties include executive director Treasury and International Banking, Executive director Retail Banking and Operations and Financial Consultant.
Central Bank governor Caleb Fundanga has assured the staff and customers at Finance Bank that the bank would be fully operational on Monday December 13, 2010.
Yesterday BoZ Head of Public Relations Kanguya Mayondi dispelled reports that government through the Central Bank was intending to take over Finance Bank and Nationalise it.
Mr Mayondi said in a statement that it was not the business of BoZ to nationalize banks, stressing that the Bank has no intention of nationalizing any bank in Zambia.
Mr Mayondi said the Bank’s business is to regulate and supervise banks and other financial service providers as outlined in the Banking and Financial Services act Cap 387 of the laws of Zambia.
Labels: BOZ, CALEB FUNDANGA, FINANCE BANK, KANGUYA MAYONDI, LEONARD HANZE
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Money sent by Zambians abroad rises to K73bn
By Chiwoyu Sinyangwe
Fri 18 June 2010, 04:00 CAT
MONEY sent back home by Zambians living abroad rose slightly to K73.8 billion in the first quarter of this year from K71.5 billion during the same period last year.
Bank of Zambia (BoZ) head of public relations Kanguya Mayondi stated that in the first quarter of 2010, there were a total of 56,335 transactions recorded compared with 51,043 recorded during the same period last year.
“The increase in remittances is attributable to the improvements in the global and domestic economic activities as the world economy began to emerge from the 2008 global financial and economic crises,” Mayondi stated in response to a press query.
“The increase in the number of designated payment system businesses was another contributing factor.”
Mayondi stated with the enactment of the national payment systems Act, there had been a marked increase in the number of non-bank financial institutions that the BoZ had designated to offer money transmission services.
“These payment system businesses have a presence in various parts of the country where such services previously never existed,” Mayondi stated.
“In this regard, access to this service has been extended, making it possible for more people to receive money from the Diaspora.”
Mayondi stated that formal collection of information and remittances by BoZ only began last year following the enactment of the national payments system Act in 2007 and subsequent designation of payment system businesses.
Typically, Zambians living abroad send money back home to help their families and to invest in various sectors such as the real estate.
Last year, K298 billion was sent back to Zambia with a total of 216,700 transactions recorded.
Labels: KANGUYA MAYONDI, REMITTANCES
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