By Amb. Emmanuel Mwamba
The news that the Bank of Zambia (BOZ) has taken possession of the Development Bank of Zambia(DBZ) because of non-compliance issues and for persistent regulatory capital deficiency, makes sad reading.
This bank is essentially a development-oriented bank. Its primary objective is to foster economic development by promoting investment and entrepreneurial activity in the country.
It provides products that commercial banks usually fail to. It provides medium to long-term loans for periods of 2-5 years and 6-10 years, respectively.
It also gives short-term financial facilities for periods of 12 to 24 months.
The failure or collapse of the development bank robs industrial projects that genuinely require long-term financing to thrive and grow.
Therefore, it requires that Government stops paying lip-service to the industrialization and national development goals and recapitalises this institution.
Further politicians have always treated this fund, like CEEC, as their automated teller machine!
We must prevent this clear abuse and theft at all cost as it robs merited projects of cheap and long-term finance that hinder in turn affect economic growth.
Further, looking at a recent report of non-performing loans being proposed to be written off, it is clear that the interests on the loans are prohibitive! This defeats the whole purpose of providing cheap and development finance.