Government must enact laws to protect businesses from Banks

SENATORS urged Government to introduce policies that protect businesses and individuals who borrow from banks but struggle to pay back due to the economic challenges facing the country.

They were debating a motion by MDC-T senator for Bulawayo, Ms Dorothy Khumalo, who called on Government to come up with policies that protect businesses and individuals whose properties faced auctioning for defaulting on repayments

Senator Nyamayabo Mashavakure, who represents the disabled, said interest rates were too high resulting in debtors failing to repay loans.

He said banks unjustifiably raised interest rates using the supply and demand principle knowing that the majority of people needed money that was in short supply.

"Banks are bemoaning liquidity challenges they face because they have failed to attract depositors due to high service charges. As a result the majority of people are not banked because they are afraid that they will lose their money to charges.

"The other reason people are not banked is because of the stringent conditions for one to open an account," he said.

ZANU-PF senator for Manicaland, Shadreck Chipanga said there was need for financial institutions to agree on payment terms with their debtors.

MDC-T representative for Harare, Mr James Makore said it was important for people who borrow to pay back instead of depending on Government to intervene on a contract between two parties.