Before scrolling to the section for loan interest rates in Zambia. What is an An Interest rate? This is a form of direct payment added to the principle amount charged by the financial lender, who can be an individual or the institution such as Banks. Its a two way transaction; for example, Banks borrow money and use it to pay Government workers and civil servants. The sum of money deposited accumulates interest based on the rate and amount you deposited. This is what the Bank later pays customers as bonus for choosing to save the money. A similar theory applies to the money you borrow for school fees and bill payments, possibly even for buying that expensive car and most importantly making a house purchase.
Loan Interest rates in Zambia offered by these financial institutions are based on the 30 Days Tenure, over 60 Days period, a 90 Days, which can be later extended to Tenure 180 Days,possibly 360 Days Tenure in common cases. Banks in Zambia are regulated and operate under the laid conditions from the Bank of Zambia, which controls financial flow, implementation of fiscal policies and most importantly cash flow in the economy.
Zambian interest rates are observed through the federal reserve Bank. These interest rate get changed over time and on a daily basis depending on the economic situation. This changes arising from the rates increasing or decreasing is not rigid. Zambia’s monetary policy changes the interest rates and when you borrow money form the bank, a loan and purchase through credit card.
Below is a table showing the updated interest rates of 2020. Bank of Zambia is a major Federal Reserve bank that observes banking System, referred to as the Federal Reserve. The independent financial institution is run by Government through the Governor. Changes loan interest rates In Zambia, controls external borrowing and improving financial bank transactions.
|TRANSACTION||INTEREST RATES 2020|
|Borrowing from Commercial Banks||22.30%|
|Conversion ratio of capital to assets||10.50%|
|Compulsory charge for commercial banks||22.30%|
|Commercial banks deposit charge||2.95%|
|Private sector domestic credit charge||11.50%|
|Change bank reserve liquid assets to bank assets||14.50%|
|Total reserves – total external debt accumulated||8.0% (GDP)|
|Total reserves from imports||1.50%|
|Government growth of abroad money||7.0%|
|Bank Customer deposit rate||6.5%|
|Bank lending interest rates||9.9%|
|Loans for none-Zambian residence||17.1%|
|External deposits and loans transacted||25.70%|
|External deposits and loans transacted (None-Banks)||30.2%|
|Domestic bank deposits and loans||50.77%|
|Domestic credit to private sector||11.9%|
|ATM withdraw charge (Automated teller machines)||12.7%|
|Private credit loans||10.99% – 100%|
|Mobile money bill payment charge||11.6%|
|Bank to Bank credit||60.0%|
|Electronic charge for payments||35.66%|
|Debit card charge rate||20.1%|
|Credit card charge rates||4.02%|