By Chimwemwe Mangazi:
Reserve Bank of Malawi (RBM) Governor, Dalitso Kabambe, and his entourage were told point blank Wednesday that they were letting down Malawians by failing to ensure that interest rates offered by commercial banks are affordable to the masses.
Chairperson of Parliamentary Joint Committee on Interest Capping, Alekeni Menyani, said this when a team from RBM enlightened committee members on what lies ahead if the country adopted interest capping legislation.
“Truth be told, governor and your entourage, Malawians feel like you have failed us; you have a duty to protect Malawians on behalf of the State and the government. In terms of loans, people have struggled. We have witnessed [people committing] suicide and that is why, when you mention a loan today, it is like you are mentioning a snake. The market-based economics have failed to solve the problem,” Menyani said.
Members of the committee further questioned the RBM how a common man can survive and develop in an environment that is characterised by high interest rates.
Kabambe responded by stressing that Malawi needs development banks that can offer long-term loans and inculcate a culture of embracing the stock market among Malawians.
“It is not an issue about my neighbour is eating fish, so we must have fish in this house. We have to look at the fundamentals and we are doing great. We project that, by 2021, inflation will come down to five percent and base lending rate will be 11 percent and the maximum rate at 15 percent.
“We will continue to push commercial banks to bring down their interest rates and, with time, we will have the interest rates we all want.
“We have not failed Malawians but it is based on how much we are producing in agriculture, tourism, manufacturing and mining. It is a reflection of how much money we are making from what we produce,” Kabambe said.