‘Zim banking sector sound’

PHILLIMON MHLANGA

Zimbabwe’s banking sector is safe and sound despite severe headwinds that have rattled the markets in the past few years, the Reserve Bank of Zimbabwe (RBZ) has said.

Central bank’s deputy director banking supervision, Rachel Mushosho (pictured) said despite some challenges in the economy, the sector remains sound with all banks adequately capitalised.

The banking sector has satisfactory asset quality with non-performing loans sitting at 1.5% as at the end of June this year.

This is against a benchmark of 5%. Total assets for the banking sector stood at ZWL$1.94 trillion while total deposits grew to ZWL$1.12 trillion.

Profit for the sector grew to ZWL$181.25bn at the end of June this year.

“The banking sector is safe and sound despite the severe challenges bedevilling the economy,” Mushosho said at the Zimbabwe Independent Banks and Banking Survey and Awards ceremony held in Harare yesterday.

“All banks are adequately capitalised and the sector is profitable. The banks have the capacity to provide credit lines to industry,” she added.

“They are resilient to shocks. Also, they have made progress towards meeting the minimum capital requirements.”

She also said the banks have made significant progress towards financial inclusion.

Mushosho also revealed that the central bank has engaged the World Bank in the implementation of the National Financial Inclusion Strategy.

“We have engaged the World Bank in the funding of surveys. We want to empower all Zimbabweans towards building resilient and sustainable livelihoods. We are targeting women, youths, rural community, people with disabilities, pensioners and the elderly,” Mushosho said.

Speaking at the same event, First Capital Bank managing director, Ciaran McSharry, said financial inclusion remained “a key part of our strategy”.

“It is something that we now unconsciously look at when developing our products and services as it inspires socio-economic growth.

This year we have chosen to amplify this message and encourage each other to keep up the momentum that has been achieved since 2016 when the Government and the Reserve Bank of Zimbabwe joined the sector through the National Financial Inclusion Strategy,” McSharry said.

He said while significant progress has been made, “we still have much ground to cover to ensure that we bring financial literacy, education, skills development, and access to finance to those that have been previously marginalised or excluded”.

“A phase 2 strategy from 2021-2025 has also been rolled out to ensure that sustainable development is achieved especially after the Covid pandemic and other world events.

“This pursuit of financial inclusion in Zimbabwe is consistent with the broader national development objectives and supports three key pillars namely food security and nutrition, social services and poverty eradication, and value addition and beneficiation as well as the sub-cluster of monetary and financial reform measures.

“As First Capital Bank, our strategy has always supported the thrust for financial inclusion, and this has been strengthened by our regional presence.

Over this period the bank has developed suitable products, solid partnerships, and a strong understanding of the market.

Service channels and loan products have progressively been configured so that they are easily accessible to key groups such as youth, women, SMEs, and agriculture.

“In the lending space, the bank offers products specifically aimed at supporting businesses owned or run by women and youths, recognising the need to ensure that they are not crowded out.

Similar products are extended to promote a culture of saving and to promote use of banking and related financial services like insurance.”