Exodus in Malawi Parliament: Opposition MPs walk out as DPP foils bank interest rate cap bill

Members of the main opposition Malawi Congress Party (MCP) and erstwhile ruling People’s Party (PP) on Thursday walked out of the House in protest over moves by the ruling Democratic Progressive Party (DPP) to stop MCP member of Parliament (MP) for Dowa West Alexander Kusamba Dzonzi from moving an interest rate cap bill—officially known as Financial Services (Amendment).

Opposition MPs walk out of parliament.-Photo by Alfred Chauwa, Nyasa Times

The bill would put a cap on high bank interest rates commercial banks charge to borrowers.

 Dzonzi was expected to move the private members’ motion amid allegations that he turned down a K200 million bribe from commercial banks for him to drop the motion, an allegations Bankers Association of Malawi has vehemently rejected.

But as he was set to move the motion, Blantyre City Central  MP, Themba Mkandawire (DPP) asked for standing orders to be waved to have government Ministers answer questions from legislators.

Thursdays are reserved for private members motion but DPP said it should be government business to answer questions first, effectively blocking Donzi  from moving the motion to put limits on how much interest rates banks, microfinance institutions, accos and other lenders can put on loans.

Pandemonium broke out in Lilongwe, the seat of parliament, when House speaker ordered a division vote and the government benches said to have won. A  shouting match began  by MCP led by its Chief Whip Robin Lowe.

The PP  legislators  also trooped out.

The Bill’s sponsor, Dzonzi,  told Nyasa Times later that his MCP party walked out because it did not want to be party to proceeding sagainst the wishes of the people, arguing the proposed legislation will create a win-win situation between money owners and lenders.

“Malawians are watching  and know that the government has been palm oiled to block the bill. DPP is denying Malawians the right to access lower lending and interest rates. We will still push for this bill back in the House, no matter when.

“Banks should not steal from Malawians. They pay themselves 
when the owners of the funds are languishing,” he said.

PP leader in parliament Ralph Mhone condemned DPP of  “doing things against the interests of poor Malawians.”

But inside the house the DPP MPs, buoyed on by  its parliamentary alliance partners United Democrtaic Front (UDF) Mps, went ahead to have ministerial questions time. 

The commercial banks, through the Bankers Association of Malawi and Reserve Bank of Malawi  have been meeting the members of parliament, giving them brown envelops with K200 000 each in order to lobby them to reject the motion.

The Financial Services Amendment Bill seeks to regulate and regularize the setting up of a ceiling of interest rates charged by banks to a maximum of five per cent below the lending rate.

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

But Paul Guta of the Bankers Association of Malawi said the bill is aimed at killing the banking sector in the country.

“In Malawi, banks are already operating in volatile financial environment. If this is passed into law, some banks would collapse,” he said.

But Consumers Association of Malawi (Cama) as well as audit and corporate governance expert Anthony Mukumbwa backed the bill, pointing out that banks are squeezing the growth of industries because of exorbitant interest rates charged, forcing companies not to borrow, which squeezes growth.

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Kayira
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Kayira

The key to economic growth is lower interest rates but also a strict credit rating system that allows the banks to reduce exposure to risk and losses. All booming economies have this 2 factors. Develop those 2 and things will start moving in the economy. Simple..

#DzukaniAmalawi
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#DzukaniAmalawi

Since when did DPP care about the poor people other than their own pockets and those of their cronies. DPP has always been short-sighted. people are and will continue to die under DPP. People are and all continue to be poor under DPP. people are and will continue to walk naked under DPP. People are and will continue to live in houses that leak. Ordinary people are and will continue to go to bed hungry. DPP government doesn’t think of poor people. To DPP people are just good for votes and nothing else.

mtete
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mtete

Let the banks charge interest on the money loaned out. Thy issue is they should not make obscene, immoral and exorbitant profits at the expense of the borrower.

Open any of the dailies and you will be surprised at the number of bullring’s being offered for salbecause the owners have been unable to service their loans. Banks just look the other way. Proceeds from the property sales adds to the bonuses banks pay out to

Malemu Daniel Phiri Wa Muthali.
Guest
Malemu Daniel Phiri Wa Muthali.

if indeed Bankers were giving out envelopes, and if indeed we have ACB it means ACB has a job to do.

Mbanji
Guest

Money rules democracies ……….

Brainy
Guest

This is the result of shallow minds when they are entrusted with making laws. How do you expect a person like Khumbo Mkandawire to contribute to this honorable house?

Che Ntopeya
Guest
Che Ntopeya

Stupid! If they have balls, they should have walked out before division (the vote). Participating in the voting simply means they were party to the consequences and that democracy won (the majority) they should have accepted the outcome. Agulugunyinda. That is why MCP will never rule this country.

Kenako Zizu
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Kenako Zizu

From an economic perspective, input based solution like interest caps or subsidies distort the market and hence it would be better to let the market determine interest rates and or support certain desirable sector through other means which banks in Malawi wouldn’t. But in a market infested with predators banks and collusion between bank’s CEOs. Interest cap is the only solution. Kudos Hon Dzonzi we fully support the bill and do not give up. What a compelling motion it was. You are the disciple of the poor. When ordinary people steal they go to jail and when banks steal they… Read more »

CHIPYELERO
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CHIPYELERO

We know the Speaker and the Government side have been corrupted to block this pro poor Bill. Shame on you Right Hon. Msowoya and the DPP elite

my beloved malawi
Guest
my beloved malawi

queit pity when We have leaders who have theirs bellies first .at. the expensince of all malawians!! malawi cannever develop with Such typ of leaders….how can the govt which is supposed to serve pple frustrate a Bill like that…….right now as am speaking these banks r giving loans to poor farmers calling them agriculture loans with huge interest rate….farmers have to work for the whole year only to realise they have paid everthing to the banks…there lives have never changed!! u pple dont have a heart

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