The government should regulate interest rates for SMEs.”- Stakeholders

By our reporter, @fullhabarionline

In a fresh bid to lower the costs of borrowing, investors are calling for capping of interest rates for Small and Medium Sized Enterprises (SMEs).

The call to regulate the interest rates was made yesterday at an event to unveil the findings of the ninth Tanzania Top 100 Mid-Sized Companies Survey, whose winners are set to be announced today during a gala dinner.

The survey, which aims to identify the fastest growing mid-sized companies and reward them, is a brainchild of Mwananchi Communications Ltd (MCL) through The Citizen brand, and KPMG, an audit, tax and advisory firm.

Presenting the findings, Dr Remidius Ruhinduka, ZA Advisory research lead, quoted the participants as saying: “The government should regulate interest rates for SMEs.”

The Bank of Tanzania (BoT) is however on record as saying that it did not favour interest rate capping, instead preferring commercial banks to compete in attracting clients through better offers. The central bank has also provided several relief on inter banking interest rates and minimum strategic reserve in order to stimulate lending to the private sector. Average lending rate for all maturities of loans, was 16.77 per cent in August 2019, lower than 16.86 in the preceding month.

Mr Ruhinduka further said the participating companies also called for an increase in the range of assets accepted as collateral.