GWERU — A senior official with the Employers Confederation of Zimbabwe (Emcoz) has blamed local financial institutions for stifling economic growth by charging high lending rates on loans.
Emcoz vice-president Josephat Kahwema said the lending rates of between 15 and 50% charged by banks were “too high and unrealistic” and discouraged many firms to borrow for their expansion projects.
“The interests rates charged when industry borrows money from local financial institutions are just too high and unrealistic and this affects business and economic growth as a whole,” Kahwema said.
“Imagine borrowing at an interest of 20%, whereas in neighbouring South Africa they borrow at 8%.
“This discourages local firms from borrowing and if industry cannot grow, then we cannot talk of economic recovery,” said Kahwema at a business, labour and government forum in Gweru recently.
“All talk and no action will lead us nowhere in realising economic recovery.” Industry and Commerce minister Welshman Ncube and Reserve Bank of Zimbabwe governor Gideon Gono had of late been vocal urging the government to introduce a policy to discourage exorbitant interests rates charged by banks.
“Our local banks are restrictive. If they relax their lending terms it could boost industry, which is not borrowing as interest rates are too high,” Ncube said.
