Zimbabwe’s lending rates have softened to 11,64 percent since January as financial institutions comply with a central bank directive to maintain a low interest rate regime aimed at stimulating productive sectors.

Information gathered by the ZBC News from the Reserve Bank of Zimbabwe (RBZ) indicates that lending rates from the banks, which were at 16,4 percent last year, are now hovering at an average of nine percent to 11,64 percent.

The lending rates are however still high in comparison with other SADC economies where they are at five percent per year.

However, banking insiders said although the softening of the rates mean an opportunity for low cost borrowings, they are being dominated by the consumptive sector at the expense of production.

Of the total lending or credit facilities by June this year, the consumptive sector accounted for 22 percent, followed by agriculture at 16,5 percent.

Manufacturing accessed 13,9 percent of the credits, services 13,2 percent and distribution 12,7 percent.

In a related development, the just-released half year financial results for the banking industry show a 48 percent increase in net profits to $100 million from $67 million over the same duration last year.

The total capital for the banks has also increased to $1,24 billion as at June this year, according to the central bank data.