Zimbabwe Eyes Cheaper Loans as Inflation Falls
By Southerton Business Times Reporter, Harare
Zimbabwe could see cheaper loans and longer repayment periods as the Government moves to capitalise on improving inflation and develop a 15-year yield curve, Finance Minister Mthuli Ncube has said.
Ncube said the sharp decline in inflation was creating conditions for interest rates to fall sustainably, potentially making long-term borrowing more affordable for businesses, farmers and households.
“It means now our interest rates can come down sustainably,” Ncube told The Herald. “We can reduce the cost of capital over time going forward and increase lending to the private sector, to citizens and just in promoting investment in general.”
The Government is working on a yield curve extending to 15 years. The benchmark would help banks, investors and businesses determine the appropriate cost of borrowing and investing over different periods.
A yield curve essentially maps interest rates across different maturities. A reliable long-term curve can help lenders price loans for projects that may take many years to generate returns.
Ncube said he had instructed officials in the Ministry’s Public Debt Department to accelerate the process.
“I was just speaking to our staff from the Debt Department to say we must speed up the development of this yield curve that goes into 15 years going forward,” he said.
The move comes as Zimbabwe’s inflation environment improves significantly after years of currency instability and rapid price increases.
Ncube said inflation had fallen to 2.9 percent, creating greater predictability for financial institutions when pricing long-term loans. However, official ZIMSTAT figures show weighted year-on-year inflation at 3.2 percent in July, while the latest August data puts monthly inflation at 0.25 percent. The Reserve Bank of Zimbabwe has also maintained a tighter monetary policy stance while gradually reducing interest rates. Its published data shows commercial lending rates remained in the 40-percent-plus range in early 2026, illustrating the substantial gap between inflation and the cost of borrowing.
Ncube said lower and more predictable inflation would reduce the risks banks face when extending credit over longer periods.
“It also means that now companies can borrow long-term. Because once inflation is low and predictable going forward, you can borrow long-term,” he said.
For businesses, cheaper long-term financing could support investment in factories, machinery, mining, agriculture, irrigation, housing and other capital-intensive projects.
Unlike short-term loans, which require frequent refinancing, long-term credit allows companies to spread repayment costs over the productive life of an investment. The Government hopes improved access to finance will increase private-sector investment and economic activity. Ncube also linked the financing push to Zimbabwe’s efforts to improve its investment profile following the World Bank’s decision to remove the country from its fragile classifications.
He said the change could strengthen investor perceptions of Zimbabwe and support increased investment into the country’s capital markets.
“We are attracting very good investment going forward, both foreign direct investment as well as investment into our capital market — Zimbabwe Stock Exchange, Victoria Falls Stock Exchange,” Ncube said.
The success of the strategy, however, will depend on whether lower inflation translates into significantly cheaper credit for ordinary borrowers and productive businesses.
For Zimbabwean companies currently facing borrowing costs in excess of 40 percent, the development of a credible 15-year yield curve could become an important step towards unlocking affordable long-term financing.
Zimbabwe cheaper loans
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