Chakwera hits at banks for exorbitant lending rates: ‘Only MCP will change this’

Malawi Congress Party (MCP) presidential torchbearer in next week’s tripartite elections has decried high interest rates on the part on commercial banks in the country but has said this will be a song of yesterday once he assumes the reins of power on May 21.

Chakwera:Why  should it be only Malawi banks with such high interest rates?

The church reverend-turned-politician, and will be giving a second try for the office of President, said on Sunday in Lilongwe East Constituency, that many Malawians were shutting down their businesses because the environment was not conducive.

According to Chakwera, some of the blocks crippling businesses in Malawi were high interest rates by the commercial banks.

An interest rate, according to business experts, is the amount of interest due per period, as a proportion of the amount lent, deposited or borrowed.

Said Chakwera: “Why  should it be only Malawi banks with such high interest rates? Our friends in Zambia, Zimbabwe,  Tanzania, and other neighbouring countries are doing so well, and here in Malawi these banks are pulling people down with exorbitant rates.”

Chakwera described borrowing money from the bank as same as getting from a loan shacker.

“We cant even ask the the current government  to fix.They have already failed to bail out Malawians from the jaws of these thieving banks because they are the same people who are the beneficiaries, ” he said.

Chakwera has since promised to bring back interest capping bill in the first year of office.

He said it was sad that few MPs denied Malawians the chance for the  bill to become law in Parliament.

“They rejected the bill in Parliament but dont worry we will bring it back,” said Chakwera.

MP Kusamba Dzonzi when tabling the bill said that the private member bill targeted setting up a ceiling of interest rates charged by banks to a maximum of 5% above the Policy Rate set by the Reserve Bank of Malawi.

The bill was, also, to regulate and regularize setting up a ceiling of total interest charged to customers by banks to not exceed the capital borrowed and setting up a floor of interest paid to depositors to the higher side of 2% above ruling inflation rates or 5% below the lending rate.

“At the moment banks are squeezing growth of industries because of exorbitant interest rates charged forcing companies not to borrow which squeezes growth.

“Note also that high interest rates have resulted in high commodity prices because vendors borrow money for trading and this impacts on levels of inflation too.

“Once companies default due to high cost of borrowing which normally overtakes company profitability, the companies scale down operations and eventually close down resulting in untold suffering of employees and their suffering,” Dzonzi had said.

And, Chakwera, in his super ‘Hi 5’ swag said Malawian lives would no longer be the same beyond May 21.

Before the Lilongwe East rally -where he asked supporters to vote for Ezekiel Ching’oma as legislator for the constituency- Chakwera attended a church service and held whistle stop tours in the vicinity.

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Tizanka
Tizanka
3 years ago

So he will dissolve the central bank?

Khalidwe
Khalidwe
3 years ago

Bank rates will fall under MCP. Take it or leave it. This daylight robbery must stops. Government has been borrowing too much because of rampant theft of public funds by DPP zealots. MCP government will reduce borrowing.

WCM
WCM
3 years ago

Mr Malonjezo mutitayitsa chabe nthawi

Panyelo
3 years ago

Better than the sleeping dogs and stealing dogs.You have my vote.too poor country property are lost like flooding fish.

Usipa basi
Usipa basi
3 years ago

Rev Chakwera. Respectfully Sir; interest rates are largely based on the risk-free rate which is government treasury bills. And treasury bills rates are high because of too much government borrowing; nothing to do with banks. Reverend, who are your economic advisors and why aren’t they giving you basic economics education on these matters? Please Sir, the office of the president is not for amateurs.

Mapwiya
Mapwiya
3 years ago

Banks have smarter people than Chakwera. Given his recent pronouncements I have my doubts he knows what he is talking about.

DPP-Extinct
DPP-Extinct
3 years ago

In addition to Banks, NOCMA and MERA are government affiliated entities which are killing Malawian small businesses. NOCMA is awarding contracts to foreign companies to supply and transport Malawian fuel. There are DPP people behind this mafia style corruption as they get kickbacks from foreigners mainly Tanzanians to tranport fuel from Tanzania to Malawi. That is why there are so many Tanzania fuel trucks on the roads of Malawi. When the new government is formed next week, whoever comes in government whether UTM or MCP, they must change MERA and NOCMA leadership. These two organisations are full of crooks who… Read more »

Boncholi
Boncholi
3 years ago

iwe Chakwera iwe Chakwera, pa 21 pakuchedwa kuti nkakuvotele, dzinadzi dzatilaka mwina nkuonako kuwala

Chimzungu
Chimzungu
3 years ago

Mr malonjezo tsopano. Sizomwe munazikana ku pariament to cap interest rate?

Chakupompha
Chakupompha
3 years ago

A reverend kuteta

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