THE country’s bank lending rates remained high despite a marginal decline in the week ending April 10, official figures have shown. Statistics from the Reserve Bank of Zimbabwe weekly economic report show that weighted commercial bank lending rates for individuals stood at 12,59 percent, down from 13,22 percent in the previous week.

Weighted lending rates for corporate clients, however, firmed to 8,88 percent during the week under review from 8,75 percent in the prior period.

The banking sector has not been spared from the liquidity challenges in the economy but has enjoyed high interest rates on loans since the adoption of the multi-currency regime, negatively affecting the local industry, which cannot afford loans for working capital at such high rates.

In a bid to reduce the average lending rates, the government in 2013 negotiated with banks to reduce their lending rates to levels below 10 percent per annum.

The agreement was however suspended before the end of the year after banks complained that the move had narrowed margins. The gap between lending and deposit rates has remained high with the majority of bank deposits being short term leading to higher rates for fixed deposits.

During the week, savings deposit rates remained unchanged at 3,54 percent but deposit rates for deposits of one month and three month tenors, however, decreased from 9,29 percent and 10,96 percent in the previous week, to close the week under analysis at 9,24 percent and 10,84 percent respectively.

Local financial institutions have maintained that the high interest rates are a result of the high risk associated with offshore borrowing, which is expensive.

The RBZ report also shows that during the review period, transactions processed through the National Payment Systems (NPS) stood at $1,1 billion, up from $938,89 million recorded in the previous week as the transactions processed through the Real Time Gross Settlement (RTGS) system increased to $889 million, from $685 million.

Mobile based transactions were 19 percent down at $74,84 million from $92,62 million recorded in the previous week. Transactions processed through ATMs were also 31 percent down from $105,42 million in the prior period to $72,94 million in the review period.

In terms of proportions, RTGS payments continued to dominate the NPS, accounting for 82,48 percent of the total value of transactions, followed by mobile-based transactions at 6,95 percent and ATMs at 6,77 percent. – BH24.

You Might Also Like

Comments