By MUTISUNGE ZULUTHE Bank of Zambia (BoZ) on April 3 announced stimulus monetary measures to support financial system stability following the outbreak of the Coronavirus.Covid-19 has brought with it, unique credit risks that will require a cushion passed on to counterparties such as corporates, SMEs and micro entrepreneurs, through the commercial banking system.This is what led to the credit line mechanism in a K10 billion ($545 million equivalent) facility to commercial banks for a period of 3-5 years priced at a 100 basis points above the benchmark policy rate. (MPR+100bps = 12.5 percent).This is the Medium-Term Emergency Funding Lending Facility (MTELF). The facility is to be looked at in tandem with the other relaxed credit and capital provisions to provide banks with space to extend borrowing in a turbulent macroeconomic environment.Guidelines for the measures were shared weeks later to compass operationalisation of the MTELF.What is the MTELF? The K10bn Medium Term Emergency Loan Facility is […]
Are banks shying away from K10bn emergency facility?
