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Interest capping faces dim future

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KUSAMBA DZONZI

The future of the Interest Capping Bill looks uncertain following parliamentarians’ failure to discuss the piece of legislation in the just-ended meeting of the august House.

Throughout the last meeting of Parliament, the motion to draft the Interest Capping Bill did not appear on the Order Paper—the official business document of Parliament.

A motion to draft the bill was initially brought to the House by Mangochi South West Member of Parliament Shadreck Namalomba on March 25 this year but was sent back as the mover did not follow procedures, including giving ample notice to the House.

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Among other things, the bill seeks to stop commercial banks and finance lending institutions from recovering more than 100 percent of the principal loaned amount.

When contacted Monday, Namalomba said he was advised to draft the bill, which he did and submitted to Parliament some weeks ago.

Namalomba said the Business Committee of the House was supposed to meet and discuss the bill before it was tabled in Parliament.

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He said when Business Committee members met, they discussed other issues and not the bill.

“The Interest Capping Bill is very much alive. It is not like it died a natural death. Malawi needs this law to protect businesses from powerful financial institutions.

“What I can say is that I am still waiting to hear as to when the bill would be discussed,” Namalomba said.

Parliament spokesperson Ian Mwenye was not immediately available for comment.

During the 2014/19 cohort of Parliament, a similar piece of legislation was moved by the then Dowa West legislator Alexander Kusamba Dzonzi, which led to the drafting of a bill but his efforts did not yield the desired results as the House was dissolved before the bill was tabled in Parliament.

However, addressing a Monetary Policy Conference in Mangochi in 2018, the then Bankers Association of Malawi president Paul Guta said the capping of interest rate was not the solution to reducing interest rates in the country.

“We agree with everybody that says interest rates are high. But I think the real issue becomes what do we do about it? The questions then become: Do you force it into the market or you work for it to do the right things to have the right outcome.”

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