FINANCE minister Bwalya Ng’andu says the uptake of the K10 billion facility has been rather slow.
Addressing journalists in Lusaka, Dr Ng’andu said the K10 billion, as explained by the Bank of Zambia, was meant to be used by businesses to re-structure, re-finance and in some cases to support new business ventures.
He noted that it was important to understand that the facility was acquired specifically through commercial banks.
“In other words, the Central Bank processes the facility to commercial banks…If you want to re-finance your project, you go to your normal bank or a financial institution, which may be a non-bank financial institution that you deal with, and request for the facility,” Dr Ng’andu said. “Once the facility has been approved by the bank, the commercial bank will go to the Central Bank… What is important to understand is that it’s not money that is being given for free [but] it’s money that you borrow with the expectation that you’ll pay it back. So, it’s important that there, is a careful assessment of what that money will be put to.”
The minister indicated that: “what we have noticed is that since the announcement was made, the uptake has been rather slow.”
He said the government was now trying to increase the level of uptake of the K10 billion.
“The Central Bank has communicated directly with the various commercial banks and non-bank financial institutions but it seemed the information had not reached to the business people. What we have agreed to do now is that we’ll firstly increase the number of non-bank financial institutions that will participate in disbursing these funds,” he said.
Dr Ng’andu added that the reason for that action was that most of the small and medium-scale enterprises usually borrow through non-bank financial institutions as opposed to directly from commercial banks.
“So, the Central Bank will identify specific number of non-bank financial institutions through which they (businesses) can access this facility. But we’ll also increase the level of interaction and flow of information to business entities,” he said. “The staff in the Ministry of Finance and in the Central Bank will be interacting directly with the various business entities such as the Chamber of Commerce, Zambia Association of Manufacturers so that they can familiarise them with the processes required in accessing this facility. We hope that with these measures being taken, we’ll see an increase in the uptake of the facility.”
Meanwhile, on the presidential directive regarding establishing of a Fund for small-scale businesses, Dr Ng’andu disclosed that modalities for the same have basically been completed.
“Within a few days, we’ll be giving details on the channels that will be used and how the Fund will be provided to support the small-scale business people – once Cabinet has gone through the proposals that we are making and has approved that we can implement,” explained Dr Ng’andu.