Bank of Zambia (BOZ) has urged Commercial Banks and Non-Banking institutions to support businesses in terms of credit extension given the constraints businesses are facing amid the Covid-19 pandemic support from financial bus.
Speaking during the launch of PricewaterhouseCoopers (PwC’s) fourth annual report on Banking and Non-Banking industry survey, BOZ Governor Christopher Mvunga said the Central Bank is not seeing as much as it would love to see in terms of credit extension to the private sector by the commercial banks.
“We expect and I am urging the Banks that in such a situation we need to preserve the businesses out there to ensure that they don’t die because it is very difficult to revive them once they have been closed,” he said.
He said the more the private sector is starved off the credit, the more the industry becomes vulnerable and the more economic activities will reverse.
Mr. Mvunga also highlighted that the country must be fully aware that the impact of the Covid 19 Pandemic is not only on the Local Economy but Globally.
He explained the global slow-down in the economy implies that the country will also as a player in the global village be impacted citing disruption in the supply value chain for the retail industry on imports of goods.
“If you speak to people in the retail industry they will tell you how disruptive it has been in terms of bringing goods from outside the country because of the disturbance of the supply value chain,” The Governor said.
Further, Bankers Association of Zambia (BAZ) Chairman Herman Kasekende noted that the depreciation of the Kwacha has continued to be a worry to clients who are mostly importers.
“That continues to be a big worry because many of our clients do import either input of finished goods.”
Mr. Kasekende said as the currency depreciates the effects will now feed through the prices in turn impacting on inflation.
He adds that growth of the country’s Gross Domestic Product (GDP) has been a worry to the Banking and Non-Banking sector.
Mr. Kasekende explained that this is because clients will see less in terms of the demand for their products resulting into more concerted efforts to cut costs.
Meanwhile PwC’s Country Senior Partner Andrew Chibuye said the Banking and Non-Banking survey launched achieved 89 percent response from commercial banks and 30 percent from registered Non-Banking institutions.

Mr. Chibuye further reveals that the report which is usually released in April shortly after the publication of the first Quarter results was deferred to later in the year due to the Covid-19 pandemic.

“We however decided to update our report and the survey itself, to consider the impacts that Covid has had on businesses,” he said.