Mphoko want banks to cut interest rates to at least 10%

The banking sector must reduce interests rates to at least 10 percent in order to remain relevant to the prevailing macro-economic environment, Vice President Phelekezela Mpoko has said.

Mphoko was officially commissioning the CBZ SME Loan Facility in Bulawayo today.

High interest rates are working against the government vision of reviving the economy through the recapitalisation of industry, he said.

Local financial institutions charge interest rates of about 40 percent while compounded rates are well over 300 percent.

In South Africa, banks charge an average of six percent interest rates.

The country is on a massive drive to attract foreign direct investment as well as the right to access lines of credit from regional and international financers.