NATIONAL Savings and Credit Bank (NCSB) says it is in the process of reviewing interest rates to facilitate borrowing among its customers.
The bank also is calling for the need to strengthen the credit reference bureau to avoid defaulters. NSCB managing director Cephas Chabu says the bank has to consider looking at risks of its applicants in the process of assessment to ascertain whether interest rates can be altered.
“We are reviewing our interest rates to match with the bank’s fundamentals as risks are the ones which contribute to high interest rates. If expectations of people putting in is stable, then we can consider changing our interest rates,”he said.
Mr Chabu said in an interview that interest rates are still considered to be high because of many defaulters adding that good borrowers suffer at the expense of bad ones. He said though Government has done a lot to improve the culture through the credit reference bureau (CRB), there is need to strengthen the system so that more defaulters are screened. He said the paying culture in Zambia has not been reliable adding that there is room for improvement by identifying bad borrowers through a strong credit reference. “In other countries the credit reference is strong, that is why customers can borrow with interest rates as low as 4 percent,” he said. Meanwhile, Private Sector Development Association (PSDA) chairperson Yusuf Dodia says the value of the (CRB) is still at its infant stage, adding that it is not the basis for banks to lend out money. Mr Dodia said in an interview that there is not enough data provided for lenders to know about people who intend to borrow money for their investments. He said the private sector always has intentions to pay back the money after borrowing but finds it difficult to do so due to complex conditions offered by most banks. He said banks issue loans to clients who do not deserve borrowing, hence the increase in the number of defaulters. “The credit reference bureau needs to strive to develop more data to banks and other lending institutions for appropriate people to borrow,” he said.