MINISTER of Finance Alexander Chikwanda says Government will not borrow more than K1 billion from domestic sources next year to enable commercial banks have enough money to lend to small and medium enterprises (SMEs) at lower interest rates.
Mr Chikwanda said Government will ensure that the 2016 fiscal year is financed through external borrowing to allow local investors access loans at reduced interest rates.
He said this during the launch of National Savings and Credit Bank (NATSAVE) branch in Nchelenge yesterday.
“Partly, we are responsible as Government for setting the high interest rates because we get large sums of money to finance the budget deficit. The current lending interest rates being charged by the banks are too exorbitant and the SMEs cannot access the facilities from the commercial banks because the products are at very high interest rates.
“Government will borrow less than K1 billion next year to enable SMEs access loans at reduced interest rates,” Mr Chikwanda said.
The minister also said Government projects that NATSAVE branches will increase from the current 35 to 70 by 2018 as it continues to support financial inclusion programmes.
He encouraged Nchelenge residents to take advantage of the presence of the NATSAVE branch to diversify their economic activities from fishing to agriculture.
Mr Chikwanda said venturing into the growing of cassava and sugar cane will improve the livelihoods of many people in the area.
He said the people of Luapula Province are business-oriented but there is need for them to tap into the massive potential in sugarcane production.
NATSAVE Nchelenge branch was opened in 2003 and the bank has been operating in a rented building.
Mr Chikwanda said NATSAVE’s Bunjimi Asset Plus Loans would go a long way in developing small-scale entrepreneurs.
NATSAVE managing director Cephas Chabu said the bank has invested K3.5 million in the construction of Nchelenge branch.
Mr Chabu said the branch has given out 698 loans worth K4,986,573.