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.

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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