Zimbabwe Caps Bank Interest Rates At 18 Percent
Friday, August 7, 2015
Zimbabwe’s central bank on Wednesday capped lending rates for finance institutions at 18% and moved in to reform the banking sector in a bid to improve economic activity and enhance stability.
Lending rates in Zimbabwe have been as high as 30% and this was stifling companies’ capacity to borrow to fund operations or revive projects. However, lenders blamed the high interest rates on high risk taken in lending to Zimbabwean companies and individuals as well as difficulties in obtaining funding for on-lending.
Now the central bank has struck an agreement with the Bankers Association of Zimbabwe (BAZ) to lower interest rates, reserve bank governor, John Mangudya, said in his mid-term monetary policy review on Wednesday. He said non-performing loans ratio for the half year to June had improved from 20% last year to 14% by June 30.