Zambia | Risk premium on lending (lending rate minus treasury bill rate, %)
Risk premium on lending is the interest rate charged by banks on loans to private sector customers minus the "risk free" treasury bill interest rate at which short-term government securities are issued or traded in the market. In some countries this spread may be negative, indicating that the market considers its best corporate clients to be lower risk than the government. The terms and conditions attached to lending rates differ by country, however, limiting their comparability. Development relevance: Both banking and financial systems enhance growth, the main factor in poverty reduction. At low levels of economic development commercial banks tend to dominate the financial system, while at higher levels domestic stock markets tend to become more active and efficient. The size and mobility of international capital flows make it increasingly important to monitor the strength of financial systems. Robust financial systems can increase economic activity and welfare, but instability can disrupt financial activity and impose widespread costs on the economy. Limitations and exceptions: Countries use a variety of reporting formats, sample designs, interest compounding formulas, averaging methods, and data presentations for indices and other data series on interest rates. The IMF's Monetary and Financial Statistics Manual does not provide guidelines beyond the general recommendation that such data should reflect market prices and effective (rather than nominal) interest rates and should be representative of the financial assets and markets to be covered. For more information, please see http://www.imf.org/external/pubs/ft/mfs/manual/index.htm. Statistical concept and methodology: The risk premium on lending is the spread between the lending rate to the private sector and the "risk-free" government rate. Spreads are expressed as an annual average. A small spread indicates that the market considers its best corporate customers to be low risk; a negative value indicates that the market considers its best corporate clients to be lower risk than the government.
Publisher
The World Bank
Origin
Republic of Zambia
Records
63
Source
Zambia | Risk premium on lending (lending rate minus treasury bill rate, %)
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
3.87 1978
4.64333333 1979
5 1980
3.75 1981
3.5 1982
5.5 1983
6.875 1984
5.39416667 1985
3.145 1986
4.69583333 1987
3.22333333 1988
-0.11 1989
9.1875 1990
6 1991
7.56666667 1992
-10.71666667 1993
-3.6525 1994
5.725 1995
1.00833333 1996
17.20833333 1997
6.86391667 1998
4.32309167 1999
7.433625 2000
1.95416667 2001
10.66155833 2002
10.59623264 2003
18.1235287 2004
11.89333333 2005
12.785 2006
6.93916667 2007
5.59666667 2008
6.66833333 2009
14.63916667 2010
9.28416667 2011
2.02333333 2012
-1.925 2013
-3.7825 2014
-5.76583333 2015
-8.78166667 2016
-2.11083333 2017
-5.07166667 2018
-10.83833333 2019
-11.32237292 2020
2021
2022
Zambia | Risk premium on lending (lending rate minus treasury bill rate, %)
Risk premium on lending is the interest rate charged by banks on loans to private sector customers minus the "risk free" treasury bill interest rate at which short-term government securities are issued or traded in the market. In some countries this spread may be negative, indicating that the market considers its best corporate clients to be lower risk than the government. The terms and conditions attached to lending rates differ by country, however, limiting their comparability. Development relevance: Both banking and financial systems enhance growth, the main factor in poverty reduction. At low levels of economic development commercial banks tend to dominate the financial system, while at higher levels domestic stock markets tend to become more active and efficient. The size and mobility of international capital flows make it increasingly important to monitor the strength of financial systems. Robust financial systems can increase economic activity and welfare, but instability can disrupt financial activity and impose widespread costs on the economy. Limitations and exceptions: Countries use a variety of reporting formats, sample designs, interest compounding formulas, averaging methods, and data presentations for indices and other data series on interest rates. The IMF's Monetary and Financial Statistics Manual does not provide guidelines beyond the general recommendation that such data should reflect market prices and effective (rather than nominal) interest rates and should be representative of the financial assets and markets to be covered. For more information, please see http://www.imf.org/external/pubs/ft/mfs/manual/index.htm. Statistical concept and methodology: The risk premium on lending is the spread between the lending rate to the private sector and the "risk-free" government rate. Spreads are expressed as an annual average. A small spread indicates that the market considers its best corporate customers to be low risk; a negative value indicates that the market considers its best corporate clients to be lower risk than the government.
Publisher
The World Bank
Origin
Republic of Zambia
Records
63
Source