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Wednesday, July 21, 2021

Govt and Financial Institutions Meet on Debt Swap for Civil Servants’ Salary-Backed Loans

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Ministry of Finance Accountant General Kennedy Musonda, Permanent Secretary Public Service Management Division (PSMD) Boniface Chimbwali, and Permanent Secretary Information and Broadcasting Services Amos Malupenga, today held a virtual meeting with commercial banks and other financial institutions to liaise on the implementation of the Civil Service debt swap initiative.

In his opening remarks, Mr Musonda said the data reconciliation exercise for the civil service debt swap initiative would take 3 months with effect from July 2021.

He told the online meeting that in the intervening period, the Government would not make any loan related deductions from Civil Servants’ salaries until the exercise is completed.

Mr Musonda clarified that the Government would continue to service obligations to eligible lenders as they fall due; in tandem with the reconciliation exercise.

He assured the meeting that third party obligations to banks are up-to-date.

“K55.3 million funding has been released today to clear all the third party obligations to commercial banks,” he said.

” The Treasury has also released K200 million today as third party payments to micro-finance institutions for the months of March and April 2021,”.

Mr Musonda added that other outstanding dues to micro-finance institutions would soon be cleared.

The Accountant General also took the opportunity to instruct banks and lending institutions to, henceforth, not extend salary backed loans to civil servants until the reconciliation process is concluded.

And the parties to the meeting agreed to continue the consultative spirit to ensure mutual satisfaction in the implementation of the initiative.

The 17 Institutions that took part in the virtual meeting, some of which were represented by the Bankers Association of Zambia, include Absa Bank, Access Bank Atlas Mara, Bayport, Eco Bank, Good fellow Finance, Indo- Zambia, Investment Bank, Izwe, Madison Finance, Natsave, Public Service Micro Finance, Stanbic, Stanchart, Totegram, Zambia National Building Society and Zanaco.

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