Financial Services Bill report in final stages

Post was last updated: February 27, 2019

By Chimwemwe Mangazi:

Chairperson of the Parliamentary Joint Committee that was tasked to scrutinise the controversial Financial Services Act Amendment Bill, Alekeni Menyani, has said the committee’s report on their consultations with stakeholders is near completion.

He has indicated that they will present the report when Parliament meets for mid-year budget review starting next week.

The bill has faced resistance from lending institutions, the Reserve Bank of Malawi (RBM) and Treasury, which argue that it will destabilise the economy.

The proposal to cap interest rates was brought to Parliament on December 8 2016 by Menyani, who also sits in the House as Dedza North West Member of Parliament.

The House recommended that a Private Member’s Bill be drafted to have Interest rate capping laws introduced in Malawi but consult stakeholders, hence establishment of the committee.

“We are finalising the report. We plan to present the report this very meeting, we have listened all the stakeholders and their input will form part of the report however, the final position on the Bill solely rests on the committee,” Menyani said.

In a separate interview member of the Joint Committee who was also responsible for drafting the bill, Alexander Kusamba Dzonzi, said there are plans to conduct further studies on the same from experiences of other African countries who implemented such laws.

“Local consultations have been completed and now we are just waiting for RBM to fund study tours to Kenya, Zambia and Ghana on the same but we expect the report to be presented during this meeting and then we will be expecting the second reading of the bill,” Dzonzi said.

Since last year, interest rates have been on a downward trajectory following similar trends in the policy rate.

Commercial banks are offering lending interest rates between 20 percent and 26 percent.

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