One of the leading banks in the country, has reduced its base lending highlighting confidence that the financial sector has in the country’s economy. Standard Bank’s action is basically a reaction to sentiments from stakeholders that the interest spread in Malawi is too wide! The discussions have centered on the causes of the wide spread (lending rates less deposit rates.)
While this is a step in the right direction, Government would like to see a situation where savers are fully compensated for inflation. And the spread is within regional levels. Businesses are now starting to enjoy lower lending rates which should spur economic activity, growth and increase in employment. We also hope this will bring in the much needed competition in the financial markets and funds will move to where they are most profitable.
