Online Reporter
Nelson Gahadza, Zimpapers Business Hub
BANKING SECTOR reform and financial deepening are at the heart of the National Development Strategy 2 (NDS2) economic transformation agenda, with Government setting an ambitious target to raise financial inclusion to over 90 percent by 2030.
Zimbabwe’s next five-year economic blueprint (2026–2030) identifies the financial services sector as a critical enabler of inclusive growth, investment mobilisation and long-term economic stability. At the core of the policy thrust are plans to widen access to formal financial services, deepen savings and credit penetration, and harness digital finance as a lever for inclusive growth.
Through NDS2, Government seeks to attract millions of unbanked and underbanked citizens into the formal system while reshaping the banking sector to support productive sectors of the economy.
However, the Actuarial Society of Zimbabwe (ASZ) has cautioned that achieving these objectives will require a fundamental shift in how banks assess risk, allocate capital and generate income. In its review of NDS2 implications for the financial services sector, ASZ said traditional lending models will no longer suffice if banks are to lend safely to productive sectors such as agriculture and small to medium enterprises (SMEs).
“In order to lend safely to the productive sectors such as agriculture and SMEs as envisaged in NDS2, banks need actuarial credit risk models that utilise alternative data points beyond traditional collateral,” ASZ said.
The society further argued that the reforms envisaged under NDS2 go beyond compliance and call for a more strategic approach to capital management.
“Actuaries and risk officers must move beyond compliance-based capital calculation to strategic capital management, allocating capital only to business lines that exceed the cost of capital,” reads part of the ASZ report.
NDS2 also mandates the reduction of transactional charges and promotes financial technology through Regulatory Sandboxes, as authorities seek to drive inclusion through affordable, digital-first solutions.
In addition, the policy enforces Risk-Based Capital regimes across the sector, a move that ASZ says will significantly alter banks’ revenue models. According to the Society, high non-interest income, which has historically cushioned banks against lending risks, will increasingly come under regulatory pressure.
“As a result, banks will be forced to rely more on funded income from lending activities and volume-driven digital transactions. This shift aligns with the broader objective of financial deepening but will test the sustainability of institutions that are slow to adapt,” reads part of the report.
ASZ said the move towards fully Risk-Based Capital frameworks for both banks and insurers would expose inefficiencies within the sector.
“The move to fully Risk-Based Capital (RBC) for banks and insurers will punish inefficient capital usage. Institutions holding lazy capital or high-risk assets without commensurate returns will face lower return on equity (ROEs),” ASZ said.
Beyond banking and inclusion, NDS2 places strong emphasis on infrastructure development and green finance, with Government relying heavily on non-budgetary financing mechanisms.
These include infrastructure bonds, Real Estate Investment Trusts (Reits) and Green Bonds, which are expected to play a growing role in funding long-term projects.
ASZ said it expected a surge in specialised financial instruments under this policy direction, further noting that this would help address the current shortage of quality assets needed to back long-term liabilities, particularly for pension funds and insurers. The society added that the definition of prescribed assets is likely to evolve towards these developmental and infrastructure-linked instruments.
“In response, investment analysts and actuaries must upskill in valuing complex infrastructure projects and pricing climate risk,” reads part of the report.
ASZ also warned that environmental, social and governance (ESG) considerations are no longer optional, urging financial institutions to establish ESG frameworks without delay.
According to ASZ, access to international credit lines and local Green Bond incentives will increasingly depend on robust ESG compliance, making sustainability a core pillar of financial deepening under NDS2 rather than a peripheral consideration.
