President Edgar Lungu says the failure by commercial banks to cut interest rates – despite the Bank of Zambia (BoZ) lowering the monetary policy rate – is thwarting government efforts to empower lower-income earners.

“Sadly, we have not seen a significant interest rate reduction by commercial banks to support government initiatives,” Lungu said on Tuesday when he met executives of Standard Chartered Bank.

According to a statement released by his special assistant for press and public relations Amos Chanda, the president called on commercial banks to do more to ensure the lowering of monetary policy rates filtered down to low-income earners, who include small-scale farmers.

The central bank in July reduced the policy lending rate from 12.5% to 11%, and statutory reserve ratio from 12.5% to 9.5%.

Along with lower interest rates and creative financing, there are a range of mechanisms aimed at improving access to capital, a major barrier for low-income earners.

For small-scale farmers, lower interest rates will mitigate the high cost of inputs, aggravated by the recent 75% hike in electricity tariffs and removal of fuel subsidies.

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