An economic expert has applauded the Reserve Bank of Malawi (RBM) for slashing the lending rate to 18 percent effective Wednesday this week.
Economic expert Ben Kalua disclosed that Malawi has been waiting to get a cut in lending rate by the country’s central bank but economic glitches had forced the bank to hike the rate making it more challenging for businesspeople to access loans from commercial banks.
“This is what we have been waiting for from Reserve Bank, just like it is the case with other countries, the slash helps citizens to be economically empowered as they borrow money for businesses,” said Kalua.
He further urged the banks to follow the trend by cutting their lending rates to citizens for the country to achieve development.
“People had to deposit money with less interests but when getting loans they were charged high interests, it is like punishing someone who can help in development of the nation so banks must follow what reserve bank has done,” he said.
RBM said on Wednesday that the reduction has been inspired by domestic and global trends on economy in the world.
Governor for RBM Dalitso Kabambe said Malawi’s economic projection is also among the factors that have led to the slash.
Malawi was reported to have highest lending rates in the southern region of Africa, something that was seen to be blocking local investors.