BAZ predicts increased credit support

THE decision to maintain the Monetary Policy Rate (MPR) at 9.75 per cent will enable commercial banks scale up credit extension to support productive sectors of the economy, Bankers Association of Zambia (BAZ) has said.

The association has also said the development reÀects the confidence in the stability of macro-economic fundamentals.

%AZ public relations officer, Miriam Zimba, said the policy rate would allow commercial banks to continue aligning the interest rates with the MPR pronouncements and scale up credit extension to support productive sectors of the economy. “In as much as there has been stagnation in credit extension to the private sector, the commercial banks will continue to provide the much needed support to the growth sectors of the economy.

As payments are received, banks are also disbursing out credit. “However, credit extension may not be growing to the expectation of the economic sectors, owing to the heightened risk of Non-Performing Loans ratio, which is currently at

3 per cent, well above the acceptable threshold of per cent,” she said.

Responding to a press Tuery, Ms Zimba said %AZ was confident that commercial banks would maintain the lending rates within the nominal rates, in line with the MPR intervention.

She said the nominal lending rates for the commercial banking sector currently stood at . per cent as at March 3 , from . per cent in December , representing a decline of .5 per cent.

Meanwhile, Ms Zimba said the macro-economic fundamentals had continued to stabilise, with an estimated Gross Domestic Product growth of 5. per cent in , from 3.5 per cent in .

Ms Zimba explained that the growth was supported by the upbeat expectation of increased copper prices on the international market.