PHILLIMON MHLANGA
Zimbabwe’s biggest mortgage lender, CABS, has broadened correspondent banking relationships with multiple international lenders, a move meant to ensure that its customers receive funds in different currencies with the international transactions happening ‘seamlessly’.
The move comes at a time when Zimbabwe has lost more than 100 correspondent banking relationships over the last 10 years. Losing long standing correspondent banking relationships has posed a significant risk to Zimbabwe’s efforts to finance international trade.
CABS managing director, Mehluli Mpofu, confirmed the broadening of the banking ties but could not be drawn into disclosing the identities of the international lenders the bank has gone into a relationship with.
“Our focus has been broadening our correspondent banking relationships because we know the one thing particularly with non-governmental organisations (NGOs) is the efficiency money can move into the country. Right now, we have a stable base of corresponding banks that will allow our international transactions to happen seamlessly,” Mpofu said.
Most international banks have been de-risking correspondent banking relationships with Zimbabwe banks.
According to the Reserve Bank of Zimbabwe governor, John Mangudya, Zimbabwe had been isolated to the extent that three years ago, Zimbabwe had about two banks the whole world that could avail finance to the southern African country. The international lenders saw Zimbabwe as a high-risk country, posing a significant risk to efforts to access credit lines from international lenders.
A few weeks ago, CABS, unveiled a nostro account designed for NGOs, which are the third biggest generators of foreign currency for Zimbabwe, after export proceeds and Diaspora remittances.
Total foreign currency receipts from NGOs , according to data obtained from the Reserve Bank of Zimbabwe, stood at US$975.16m in 2021 from US$647.m in 2020.
Mpofu said with NGOs contributing a significant portion of inflows and deposits, the bank was making it easy for them to receive nostro funds through its network of correspondent banks.
CABS is a unit of Zimbabwe’s biggest financial services group, Old Mutual.
