Malawi government has said that the reduction of base lending rate by Standard Bank Malawi from 27 percent to 25 percent is an indication that banks are happy with the country’s economy.
According to a statement issued government, Standard Bank’s action is basically a reaction to sentiments from stakeholders that the interest spread in Malawi is too wide and the discussions have centred on the causes of the broad spread.
“One of the leading banks in the country, has reduced its base lending highlighting confidence that the financial sector has in the country’s economy.
“While this is a step ahead in the right direction, Government would like to see a situation where savers are fully compensated for inflation,” reads the statement.
According to the statement, the trimming of lending rate means that businesses now are starting to enjoy lower lending rates which should spur economic activity, growth and increase in employment.
“We also hope that this will bring in much needed competition in the financial markets and funds will move to where they are most profitable,” says the statement.