State should unlock liquidity - ZACCI

GOVERNMENT should unlock liquidity in the market which has remained a constraint to small entrepreneurs participating in economic growth.

This is according to Zambia Chamber of Commerce and Industry (ZACCI) president, Michael Nyirenda.

Mr Nyirenda said much as the business environment had been conducive so far, liquidity was still locked in the market, making it difficult for small entrepreneurs to expand and contribute to the economy.

He said in an interview commercial banks were finding it difficult to extend credit to small businesses because the money was locked by Government borrowing.

“During the last two quarters, the business environment has been conducive but the challenge is that there is no liquidity in the market. This is a fact.

“We are encouraging Government to find money to pay contractors, especially for Small and Medium Entrepreneurs (SMEs), the bigger companies might fall on their reserves but for an upcoming SMEs, they cannot do anything,” he said.

On the cost of money, Mr Nyirenda said ZA&&, appreciated efforts by Government to reduce interest rates through monetary policy.

He, however, pointed out that the efforts had not benefitted the 6M(s.

“Interest rates going forward is that we should grow with the economy, the economy may not grow as much as it should if the locals are not being able to participate and not able to borrow at favourable rates.

“We know Government has done a lot in terms of policy rates but that has not translated into the actual cost of money borrowing and the banks will tell you it is because of the Non-Performing Loans,” Mr Nyirenda said.

Mr Nyirenda said assets for SMEs were being threatened by people who had lent them money through other means.