BoZ CLOSES THE K10BN STIMULUS PACKAGE

THE K10 billion Targeted Medium-Term Refinancing Facility ( TMTRF) which was put in place to cushion businesses and households from ravages of Covid-19 by the Bank of Zambia (BoZ) has officially been closed.

All financial service providers who had intentions of accessing funds from the facility have therefore been advised to find other alternatives.

About K10.5 billion has been disbursed from the facility which was put in place in April last year.

The Central Bank is currently reviewing the facility and no more resources will be made available, according to the BoZ Governor, Denny Kalyalya.

“We had put in place the TMTRF, and well, this has run its course, we made approvals close to K10 billion. So this facility has closed. We are at the moment reviewing what exactly happened when this facility was in place.

“But what is important is that going forward, no more resources will be coming from this. So the players who were looking forward to access some funds will have to find other ways in which they can get support,” Dr Kalyalya said at the monetary policy rate announcement this week in Lusaka.

Recently, BoZ Assistant Director – Communications, Besnat Mwanza, said it should be understood that the TMTRF was a temporary intervention which should not be viewed as a business-as-usual measure that could be instituted during normal times.

She said “as the Covid-19 shock dissipates, the Bank expects a return to normalcy where FSPs resume their intermediation role and the Bank will continue its work of safeguarding price and financial system stability.”

On repayment, Ms Mwanza said as per terms and conditions, the principal repayments should be in one bullet payment at maturity.

She explained that there was an option for early part payments, but any outstanding amount should be settled at maturity.

“The interest should be paid annually and the Bank gave a 12-months grace period on both principal and interest. However, some FSPs did not take advantage of the moratorium and have begun to repay the loans,” Ms Mwanza stated.