Interest rate capping: Bypport Financial Services lays off workers, likely to close

Dear Editor

On 22^nd March 2013 Bayport Financial Services Limited laid off about 42 members of staff countrywide without notice. 

The said staff were ambush by letters from Executive Management which were handed to the staff almost at the exact hour countrywide. 

To the staffs’ surprise the letters when they opened the envelopes marked Private & Confidential thinking it was to do with the yearly salary increments, the letters were instead letters of separation subject reading “TERMINATION OF EMPLOYMENT – REDUNDANCY”. 

The remaining staff where further surprised to be told that if they did not receive a letter they were lucky. Management closed the business on this day at 14:00 hrs from the general public to enable them present the letters of separation to the effected staff.

There was no prior indication either earlier to the closed of last year (2012) or the beginning of this year (2013) by Management that the institution may downsize. 

In fact, on 24^th December, 2012 the CEO Mr. Justin Chola issued a Christmas Message to all staff via e-mail assuring staff that Bayport business to continue growing at the same rate and if anything they (the Board and Executive Management) expected to see accelerated growth as regulation and other market dynamics will inevitably force a “share out” in the industry, but Bayport is well positioned and prepared to take advantage of that.

On January 3, 2013, the Zambian government abruptly capped micro-lenders’ interest rates at 42 percent yesterday, after President Michael Sata complained that high borrowing costs in Africa’s biggest copper producer were stifling investment and job creation.

But Association of Microfinance Institutions of Zambia warned immediatelly that the  central bank’s decision to limit interest rates micro-lenders charge would  force them out of business.
“In the worst case scenario, this could result in microfinance institutions closing down as it would be unsustainable for them to continue operating,” Webby Mate, executive director of the Association of Microfinance Institutions of Zambia, said yesterday in a reply to e-mailed questions. Micro-lenders’ clients “will have no viable alternatives” because financial inclusion in Zambia is less than 40 percent, he said.