COMMERCIAL banks have hiked their Minimum Lending Rates (MLRs) to surpass the 100% mark, further dampening economic prosperity prospects of already cash-strapped customer
Analysts said customers would now spend more time repaying interest on borrowed money than actually repaying the original amount borrowed. They said by year-end customers would be asked to pay 200% in interest for monies borrowed from commercial banks.
The Reserve Bank of Zimbabwe (RBZ), which has been accused of keeping a blind eye on the commercial banking sector activities, has allowed the financial institutions to slap the huge amounts on customers.
The move comes less than a month after the 150-member government-appointed National Economic Consultative Forum (Necf) said it was making “frantic efforts” to curb and arrest “rapid expansion in money supply to about 150% by December 2002 and unsustainable rates of inflation that accelerated to 228% by March”.
Commercial banks have been increasing their MLRs almost every month now, claiming that this was in tandem with the hyper-inflationary environment.
The country’s inflation figure, which stood at 426,6% in August, shot up to 455,5% for September.
Analysts say the continued skyrocketing inflation figure could result in commercial banks charging 200% before year-end, making Zimbabwe a “no-go area” for investors.
The latest MLR figures show that Kingdom Bank Ltd, Standard Chartered Bank Zimbabwe Ltd First Banking Corporation, and NMB Bank are charging 120%, up from the 98% charged last month.
Other banks are still charging 98% but are mooting increasing the figure to 120% before month-end.