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BoZ ready to ‘top up’ K10 bn stimulus

Financial Service Providers will get support to address Covid-19 fall out

BUUMBA CHIMBULU writes

THE Bank of Zambia (BoZ) has the flexibility to provide more funding beyond the K10 billion facility meant to provide liquidity for businesses at affordable rates should there be more demand from Financial Service Providers.

The Central Bank in April this year put in place a K10 billion stimulus package to assist with liquidity to businesses during the Covid-19 period.

So far, K4 billion has been approved from the stimulus package by the Central Bank.

BoZ Deputy Governor for Operations, Francis Chipimo, said the Central Bank had the flexibility to provide more funding beyond the K10 billion.

“Well off course we set this thing [facility] up to help the economy, I think if that situation does arise, we have the flexibility to look at whether we can provide more funding in that we have the flexibility to do that .

“In our presentations on the facility we have indicated that this is an initial amount, so if there is demand that can be done,” Dr Chipimo said recently during a BoZ radio show programme in Lusaka.

Dr Chipimo also said one of the conditions for the facility was that Financial Service Providers had to identify that their clients who were getting the funding had challenges related to the Covid-19 issues before drawing the money.

He further said access to the facility was not restricted to one Financial Service Provider.

He said FSPs who had drawn funding from the facility were both refinancing and providing new loans to their clients.

Atlas Mara Zambia, Indo Zambia Bank and other Non-Bank institutions have drawn K1 billion out of the K4 billion approved.

“So if they have clients who had bad loans from before, they are not likely to take those on, but for those clients who can demonstrate that it is related to Covid-19 and off course that is straight forward.

“If you look at it in terms of what is happening in the economy, those ones, the banks should be able to support,” Dr Chipimo said.

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