Parliament soliciting expert views on interest rate capping law: ‘Banks should not steal from Malawians’

Malawi Parliament has started soliciting views on interest rate capping bill which an opposition legislator moved in the 193 strong House to stop commercial banks from charging high interest rates.

Dzonzi: The proposed legislation will create a win-win situation between money owners and lenders

Alekeni Menyani, the chairman of the joint Public Affairs Committee, Women Caucus and Government Assurance Committee said there was indeed need for a law to regulate bank interest rates.

“But all the players should discuss this important issue with sober minds. There should not be emotions. We should all be guided by facts,” said Menyani.

Chairlady of Women Caucus Jessie Kabwila said the bill was very important for women.

“The high interest rates deter most women from getting bank loans, this is why they are not doing well in their businesses. This is a hindrance to the progress of women in the country,” she said.

Malawi Congress Party (MCP) member of Parliament for Dowa West Constituency, Alexander Kusamba Dzonzi, who also tabled the Private Member’s Bill in Parliament in December, said the latest reduction of bank interest loans was politically motivated, saying this shows it was possible to put a cap on the interest rates.

“The Reserve Bank of Malawi has reduced the bank rates drastically due to politics but the economy has not collapsed,” he said.

RBM spokesperson Mbame Ngwira says the decision to reduce the interest rates was not political, saying the central bank is independent.

Bankers Association of Malawi (Bam) president, Paul Guta, said while commercial banks agree that interest rates are high in the country, there is a need to do the right things rather than capping.

Reserve Bank of Malawi (RBM) Governor Dalitso Kabambe is on record as having said the monetary authority has had a lot of intervention on interest rates, but whether the current policy is the right framework in place or there is need to revisit the policy is up to players in the industry to discuss.

Interest rate capping is a regulatory measure that prevents banks or other financial institutions from charging more than a certain level of interest.

Currently, commercial banks have pegged their base interest rates between 23 percent and 27 percent.

The Bill, which proposes to cap the interest rate applicable on the credit facility to a certain percentage above the prevailing policy rate for lenders and below the same policy for depositors, was first tabled in Parliament in December under the Private Members Bill by Dowa West legislator, Kusamba Dzonzi.

Investment and property portfolio management firm Alliance Capital Limited (ACL) has said the debate on interest rate capping should not be dismissed outright on account of unintended consequences experienced in some countries.

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concerned citizen
concerned citizen
2 years ago

Malawi the only country in the SADC grouping with the highest of bank interest rates. Highest cost of living. Ect Ect.

mac
mac
2 years ago

No wonder our country is the poorest in the world as statics says. Vuto timakhala ngati timadya ndale. Boma likalakwitsa osapota chipani cholamula amapanga backup. Tikadali kugwiritsidwa ntchito molakwika. Ma bank akuba even ndalama za savings boma likungowona mmalo motiteteza. Pano kulipira ndi public toilet yomwe pamene tikupereka misonkho. Pokhapokha titagwirana manja tidzilira mpaka Yesu kubwera ufulu ovota okha basi. Ku RSA ngakhale masapota a chipani cholamula ndi amene amaguba zinthu ngati sizikuyenda bwino. Aliyense pano akuthamangira ndale funso mkumati why? Kuyambira woimba, wampira, mtolankhani etc. Zikutanthauza ku ndale kwabooka kuba. Tukurani maso amalawi azanga.

Che Shaibu
Che Shaibu
2 years ago

How can we make Honorable Kusamba Dzonzi the next President of this country?

Chingaipe
Chingaipe
2 years ago

Cap government borrowing from banks

Prophet Mboro
2 years ago

This is best of all you have stayed in Government.Bank and chief executives have been swimming in monies.We need to see the banks writing off some loans which fails for good reason rather than citizens losing property.Eg serious illness,Deaths,catastrophes, mob attacks etc

Kwazizira
Kwazizira
2 years ago

Not this same parliament that shot down the discussion after Honorable Kusamba Dzonzi had done everything possible to have this bill tabled.

Kachimanga
Kachimanga
2 years ago
Reply to  Kwazizira

The bill was not shot down.To the contrary it was unanimously agreed to and referred to a joint committee for further scrutiny in line with parliamentary procedures before it goes for second reading

Fredrick Sakala
Fredrick Sakala
2 years ago

Chaponda clever oldman keeping in the house to save noise

Amulilenji
Amulilenji
2 years ago

Kusamba Dzonzi..I salute you.The country is full of greedy individuals who think that the best they can do is to increase fat thickness in their tummies without [email protected] poor man who is affected by these high interest rates

Said
Said
2 years ago
Reply to  Amulilenji

This is a very important bill , I hope this time around our members of parliament will take the matter seriously . You must love your country

Msakadzinja
Msakadzinja
2 years ago
Reply to  Amulilenji

Hon. Dzonzi , we support the proposal and this is the only way to go.

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