‘Tortoise K10 billion Bank of Zambia stimulus package disbursements’ worries Kelvin Chisanga
‘Tortoise K10 billion Bank of Zambia disbursements worries Kelvin Chisanga
By Kelvin Chisanga, Communications Specialist
BOZ Stimulus Package currently on low economic endorsements, a portion swayed to social benefits on Individuals and households!
The K10 billion stimulus package that was set up primarily to cushion the aggressive economic impact driven by COVID-19, was facilitated as a targeted and focused forward-looking economic measure as tactical tool to help in revamping the local economy through refinancing of economic agencies on a medium term conditions, with a maximum repayment tenure cycle of five years for strategic projects and minimum of two years based on the priority sectorial ratio levels earmarked in the Seventh National Development Plan.
However, it is gratifying to state that despite working on this trajectory plan to mitigate COVID-19, the Targeted Medium-Term Refinancing Facility (TMTRF) was not based on 7thNDP as this novel virus came on the scene later after the formulation of 7thNDP but suffice to say economic stimulus package can help attend to certain areas of economic interest. The stimulus package has since been seen with some progressive commitments, as economic activities will likely to pick up given if the right market instruments, the facility has been noted to have received a total number of applicants in Kwacha term value exceeding slightly over a Ten Billion mark, and all these are drawn from the 28 applicants who threw in, with a total value request of roughly K10.2 Billion.
The major composition of applicants on approved advances were 11, denoted of the financial commercial banks and the other 17 players were drawn from the non-banks, with a total value of K5, 282.500.000 while K4,914.260.000 respectively, the former being a total volume coming from the direct financial banks on the market. In this category, we have seen that the banks have taken a leading role which indicates that the sector had pushed in some solid and attractive proposals, with a strong focus targeting on priority sectors for strategic projects and this shows that to state that credit services still remains very attractive within the banking sector, as the institutions have a robust plan to help in steering of local businesses coupled with vast risk assessment portfolios, to this effect, the banking sector has earned a good percentage of 91.6% under this specific classification, while the non-banks saw an uptake of 16.9% generated from the total approved value.
The Central Bank has so far approved of 20 applications which comprised equal numbers of all refinancing prospects, all represented equally from both ends on the loan seeking profile, the local banking players and non-financial banks applicants have all in total accumulated an approved figure to the tune of K5, 395.420.000 collectively, a percentage which is currently sitting at 52.9% based on the overall amount so far approved, and this is a current percentage that has been taken into considerations from the total number of 28 applications that were received.
The Apex Bank has so far earmarked its progress by disbursing advances to about 11 institutions, of which we have 6 banks sitting at 87.33% on disbursed advances, with a total disburse value of K1.5 billion and the 5 non-banks sitting with a 12.67% uptake from the total value of K5.4 billion. The stimulus package has so far taken out 13,398 clients who have actually benefitted from this facility through reduced interest rates and repayment holidays ranging from 3 months to 1 year grace. Meanwhile, on the contrary, we have seen the low uptake recorded within the banking sector with a very unattractive number of economic participants on this package.
The uptake of this package might be worrying considering the band of loan off-takers of the facility, has been seen to have a huge pile of Individuals and households while industries and production remains low as Tourism getting second position from the list followed by the Wholesale and retail trade, Real estate, while those enshrined as priority focus sectors such as agriculture, energy …, as documented in the seventh national development plan are badly financed. Glad to mention that on the banking side, it’s good to see that Atlas Mara is topping the banking profile on the stimulus followed by Stanbic Bank Zambia and in the third row Indo-Zambia Bank. It is surprisingly to note that the big five banks with some good operational tentacles countrywide such as Zanaco, FNB, Standard Chartered bank are not included as facility aggregators.