Banking Industry Zimbabwe | Who Owns Whom (2024)

Report Coverage

This report on The Banking Sector in Zimbabwe includes commercial banks, merchant banks and building societies, the central bank, development finance institutions, and other credit granting facilities including microfinancing. It includes the latest available information on the state and size of the sector and factors that influence it such as the change in the currency and inflation. There are profiles of 24 companies including the Reserve Bank of Zimbabwe, commercial banks such as CBZ and Ecobank, microfinance banks such as GetBucks and development finance institutions including the Infrastructure Development Bank.

The Banking Sector in Zimbabwe

The performance of Zimbabwe’s banking sector is constrained by the economy. The re-introduction of the local currency did not bring economic relief, and exacerbated cash shortages and hampered trade. The decline in the number of banks in the past decade resulted from the collapse of some locally-owned banks and consolidations and mergers to meet new stringent regulatory capital requirements. Bank failures resulted from poor corporate governance, insolvency and imprudent lending activities, exacerbated by low confidence in the banking sector due to high transactional costs and marginal rates on deposits.

Digital Financial Services

Due to the cash crisis in Zimbabwe, the increased use of alternatives for cash transactions has seen most service providers in the public and private sector adopting mobile money and point-of-sale to process payments. These digital channels are now the most common alternative for the country’s unbanked population and the significant informal sector.

Microfinance Institutions

Commercial banks are competing with the increasing number of microfinance institutions that are empowered by government initiatives to improve financial inclusion. Many consumers choose microfinance institutions instead of banks because of more flexible conditions as many accept motor vehicles and other movable assets such as livestock as collateral which is convenient to low-income borrowers. The Reserve Bank’s Microfinance Development Committee was established to develop a microfinance development strategy for financial institutions to serve the low income and marginalised groups.

Historical Reports

Report Coverage

The detailed report on the Zimbabwean banking sector describes current conditions, the latest events and regulatory developments and factors influencing the success of the sector. The report profiles 23 companies involved in the sector including the People’s Own Savings Bank, which has 34 branches countrywide. It also has 296 third-party retail networks contracted as agents, who are authorised to offer selected products and services such as bill payments, cash deposits, internal transfers and balance enquiries on behalf of the bank. Also profiled is Barclays Bank of Zimbabwe which used to be part of Barclays Bank Plc until it was sold to Malawi’s FMB Capital Holding in 2017.

The Banking Sector in Zimbabwe

The report on the Zimbabwean banking industry covers the Reserve Bank of Zimbabwe and deposit-taking institutions such as commercial banks, co-operatives, microfinance institutions (MFIs) and building societies. In 2016 the financial services sector contributed about 7% to GDP and total banking sector assets grew by 9.6% from US$10.26bn in September 2017 to US$11.25bn at the end of 2017. Of the current 19 licensed banks, 14 are commercial banks, four are building societies and there is one merchant bank that has been in provisional judicial management since 2015. In the sector 189 licensed MFIs are active; 184 are credit-only and money-lending MFIs while five are deposit-taking MFIs.

Difficult Conditions

The current distress in the Zimbabwean banking sector is caused by an operating environment characterised by weak economic activity and cash and foreign currency shortages. Fiscal imbalances combined with the large volume of domestic borrowing in 2015/16 weakened the financial sector. The fiscal cash deficit was largely financed from domestic financial markets as external arrears prevented Zimbabwe from gaining access to international capital markets. Cash shortages followed, financing for imports dried up, and the current account deficit narrowed dramatically. The liquidity of banks is still under threat from the large fiscal deficit and government’s efforts to settle lending from banks by Treasury Bills that are being traded at discounts of around 40%.

Historical Reports