|
BUSINESS FINANCING STILL CHALLENGED BY LOW PER CAPITA CONSUMPTION |
|
Written by Chibamba Kanyama
|
|
Monday, 01 February 2010 11:32 |
COMMENTARY 1ST – 7TH February, 2010.The Deputy Mission at the American Embassy in Zambia, Michael Koplovski, is reported to have challenged the Zambian financial sector to make access to finance easy for the business community.
The truth is that the default rate among Zambian borrowers across various financial institutions is over 15 percent and this development has largely contributed to the failure by banks to attain the projected profitability in 2009.
Business financing in Zambia is facing very serious challenge, not only because the interest rates are far higher than the global average but because the business environment is still hampered by various bottlenecks. The low per capita consumption accounts for the failure by businesses to pay back loans. Most businesses are operating below capacity owing to poor demand for their goods and services.
It is for this reason government should work towards unlocking consumption through demand-inducing taxes such as lower Pay-As-You-Earn and Value added tax. The real economic effect of a flexible fiscal policy has a direct positive impact on the performance of industry, general economic activity, Gross Domestic Product, job creation and higher government revenue based on an increase in taxable volumes and values.
|
|
Read more...
|
