ECONOMIST Noel Nkhoma says the Bank of Zambia’s (BoZ) decision to raise the Monetary Policy Rate (MPR) by 50 basis points will increase the Non-Performing Loans (NPL) ratio, a situation that will result in more loan defaults on existing credit facilities. In response to a query, Nkhoma, the Betternow Finance Limited chief executive officer, observed that with NPLs having reached an average of 25 per cent in both bank and non-bank institutions, the risk to the financial sector following the marginal hike in the MPR to 8.5 per cent is that more borrowers will default on their existing loan facilities at a time when asset quality in balance sheets was deteriorating. “The decision to raise the Policy Rate will further...