By KENNEDY MUPESENI –
SOME stakeholders have challenged the commercial banks and other financial lending institutions in the country to reduce the lending  interest rates in line with the drastic drop in the country’s rate of inflation.
An enterprise development consultant, the Kitwe District Chamber of Commerce and Industry (KDCC) and other stakeholders say that the lending interest rates should come down given the reduced rate of inflation.
The rate of inflation has reduced from 21 per cent a few months to the current seven per cent.
For January, 2017 the inflation as announced by the Central Statistics Office dropped from last December’s 7.5 per cent to seven per cent.
Franklin Membe said there is need for the financial institutions to relax interest rates to be in tandem with the current rate of inflation.
Bank interests rates are still hovering around 40 per cent with policy monetary being capped at around 15.5 per cent despite the two factors being attributed to inflation among other indicators such as foreign exchange, which has also recorded some semblance of stability.
“There is need to relax the cost of borrowing a bit now that inflation is in single digit. The economy can only be propelled if the cost of borrowing is brought at minimum,” said Mr Membe who is a lecturer at Zambia Institute for Chartered Accountancy Studies (ZICA) in an interview yesterday.
He also said development institutions like he Development Bank of Zambia (DBZ), Citizen Economic Empowerment Commission (CEEC) and pension funds institutions should be redesigned so as to start offering long term financing to SMEs.
KDCC president Allan Nyirenda urged the Bank of Zambia (BoZ) to monitor the activities of the banks to bring the interest rate in tandem with the rate of inflation.
“It is surprising that the rate of inflation has gone down from as high as 21 per cent to now single digit in January, 2017 but things have not changed.
“The cost of borrowing is still hovering around 30-40 per cent rendering the movement in the inflation meaningless,” Mr Nyirenda said.
He said the industry looks forward to the cheaper sources of funding hence the need for the central bank to shed more light why certain economic fundamentals had remained static.