BOZ promotes responsible borrowing, clamp on sharks at ACS

The Bank of Zambia (BOZ) has reiterated […]

The Bank of Zambia (BOZ) has reiterated its commitment to clamping unregistered lending institutions and promoting responsible borrowing amidst the increase of lending institutions, both online and physical.

Speaking in an interview with the Zambian Business Times, during the this year’s show dubbed fostering trade and investment, Examiner in Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) Supervision Simon Zulu called members of the public to carefully consider the terms and conditions of the loans before accessing, in a bid to avoid straining financially.

 “Desperation is one of the major pitfalls of mistakes when lending money. Once you are desperate, you will forget to read the terms and conditions. Managing desperation ensures that you get a loan within your repayment capacity,” he added.

He called on members of the public to consider the charge fees and interest rates. However, Zulu also stated that it is important for members of the public to know the difference between a bad loan and a good loan, with the latter considered to be one that leads to incremental wealth, revealing that bad loans normally have no subsequent increase of wealth.

Commenting on the difference between a shark and a registered lending institution, Consumer Compliance and Market Monitoring Examiner Mutale Besa revealed that BOZ has a website platform that details registered institutions and urged members of the public to acclimatize to the platform.

 “Most of these loan sharks won’t give you a contract; most of the sharks don’t give a key fact statement or documentation. The institution must check that you don’t borrow more than 40 percent of your income; it is illegal,” she emphasized. Besa further added that most sharks do not have proper offices or infrastructure, which should be considered a red flag.

By Justine Phiri