Online Reporter
Nelson Gahadza
ZIMBABWE’S banking sector deposits continue to grow steadily, but the bulk of these funds remain concentrated in short-term and demand accounts, limiting the sector’s capacity to support long-term lending and productive investment.
This mismatch between rising deposit volumes and their short-term nature carries significant implications for both banks and the wider economy.
For lenders, it constrains their ability to finance infrastructure, industrial expansion and housing projects that require patient, long-term capital. For the economy, it dampens prospects for sustained growth, job creation and private sector development.
Recent financial results from CBZ Holdings for the year ended December 31, 2025 show that the group’s deposits surpassed the US$1 billion mark, up from approximately US$900 million in 2024. The growth was driven by a strong customer base and increasing traction from diversified banking and ecosystem strategy. However, the deposit mix remains heavily skewed towards short-term funds.
Demand deposits stood at US$774,87 million, savings deposits at US$27,15 million, credit lines at US$161,33 million and time deposits at US$74,62 million.
Similarly, FBC Holdings reported a 32,1 percent increase in total deposits over the same period, rising to US$586,2 million from US$443,9 million in FY2024. The group attributed the improved deposit mix and stronger funding stability to a significant rebalancing of its client base, with a shift towards wholesale and retail trade.
According to Bankers Association of Zimbabwe chief executive Mr Fanuel Mutogo, the authorities have introduced a strengthened interest rate framework under the 2026 Monetary Policy Statement to encourage long-term savings. In an interview, he noted that maintaining positive real interest rates — returns above inflation — is intended to incentivise a shift from consumption-driven behaviour towards longer-term deposits.
“Under the current framework, minimum interest rates for 2026 are set at 5 percent for ZiG (Zimbabwe Gold) savings accounts and 2,5 percent for US dollar accounts, while time deposits attract 7,5 percent in ZiG and 4 percent in US dollars,” he said.
“Banks are also aligning their product strategies with these policy measures by rewarding deposit duration.”
He said in practice, customers who kept funds in the bank for longer periods earned progressively higher returns, a mechanism designed to promote long-term saving over transactional account usage. From a macroeconomic perspective, Mr Mutogo said sustained stability remained critical to deepening the savings culture.
“Consistent efforts to maintain exchange rate stability and low inflation are essential in building confidence and encouraging households to shift from immediate consumption to long-term financial planning,” he said. Presenting CBZ Holdings’ 2025 financial results, chief executive officer Mr Lawrence Nyazema said Zimbabwe continued to operate largely as a cash-based economy, with significant withdrawals occurring shortly after salaries are credited, limiting the banking system’s ability to retain liquidity.
“Despite these constraints, CBZ’s deposit growth was largely driven by organic expansion in its core banking business rather than reliance on external funding,” Mr Nyazema said. He added that of the US$232 million increase in deposits during the year, only US$42 million came from net credit lines, with the bulk of growth originating from current accounts.
He noted that fixed deposits and savings accounts contributed to the overall increase.
Analysts estimate that as much as US$5 billion may circulate outside the formal banking system at any given time, exceeding the sector’s total deposit base of approximately US$4,8 billion. This structural imbalance continues to constrain lending capacity and broader economic expansion.
Mr Nyazema said bridging this gap is critical to building a resilient financial system capable of supporting Zimbabwe’s US$50 billion economy. He said CBZ was pursuing a multi-pronged strategy aimed at improving financial inclusion, particularly among informal sector players and small to medium enterprises.
“Central to this approach is product innovation tailored to irregular and often undocumented income streams,” he said.
An analyst with Trigrams Investments, Mr Wafa Kuchera, said long-term deposits were essential to support long-term lending, yet customers remained reluctant to lock in funds. “While fiscal and monetary authorities have made efforts to restore confidence, these assurances would be stronger if embedded in legislation that guarantees deposit protection,” he said.
Mr Kuchera cited the introduction of the Mosi-oa-Tunya gold coins as evidence that savers were willing to commit to longer-term instruments when adequate safeguards, such as prescribed asset status, are in place. From a banking innovation perspective, he was critical of current industry practices, arguing that high transaction charges and monthly service fees discouraged long-term saving. He said meaningful reform would require reducing or eliminating some of these charges, noting that banks had sufficient room to adjust pricing without undermining profitability.
On taxation and capital market development, Mr Kuchera acknowledged that financial instruments have already benefitted from relatively supportive tax treatment.
However, he pointed to the intermediated money transfer tax (IMTT) as a persistent distortion in the financial system, even as it has contributed to reducing money velocity and curbing inflation. He highlighted that current tax and interest rate conditions still provided sufficient flexibility for capital market players to design products that channel deposits into productive long-term investments, provided confidence and structural reforms continue to improve.
Tinaye Agere