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In the case of Interfin, it is clear that there were some issues of poor corporate governance that led to the myriad of problems that swallowed the institution. An element of betrayal of trust and general abuse of depositors’ funds by the shareholders contributed to the rot.
The shareholders apparently failed to uphold the basic tenets of corporate governance and abused the trust entrusted in them by the depositors and engaged in unethical conduct that eventually led to the intervention by the central bank.
Genesis, on the other hand, presents a case of a bank failure that unsuccessfully tried to court other investors. There must have been something wrong with the institution considering that up to 20 suitors tried but failed to get into bed with them.
What makes me more concerned with the Interfin scenario is that it is yet another debacle for an indigenous Zimbabwean-owned bank that has embarrassingly failed us. Worse still, it is coming at a time when calls for the indigenisation of the banking sector are beginning to get louder. Is this what we want to leave for generations to come?
It would appear that there is a growing trend that after successfully setting up these ventures based on the trust of the depositors, the owners turn around and abuse that trust. I am sure most of us will recall the banking crisis of 2004 that shook the confidence levels in the banking sector, and now this?
At a time when efforts are being made to encourage more people to engage more in the formal banking activities, the Interfin/Genesis saga could not have come at amore opportune time.
The situation calls for a more proactive stance by the Reserve Bank of Zimbabwe to constantly monitor the banking sector to ensure that they do not deviate from their mandate. They should be able to determine the status of the individual banks from a distance and know when to raise the flag. In the case for Interfin, it seems this was a little too late, as the damage had already been inflicted.
I have the utmost respect for accomplished entrepreneur Farai Rwodzi and over the years, I have closely followed how he has built his empire spanning across all sectors of the economy from banking, mining to manufacturing.
To me he strikes me as a serial entrepreneur who is constantly on the lookout for opportunities. efore pointing an accusing finger at Farai that he failed depositors, there is also a case for the regulatory authorities who should have detected that there was something amiss.
I would be the last person to accuse indigenous bankers that they are letting us down, but equally I am one cautious observer who has been closely following the events as they unfold.
Realistically, some of these banks have been struggling to survive and had to seek external partners to meet the prescribed minimum capital requirements.
My point here is that why can’t these banks pool their resources and strengthen their institutions instead of just hanging on to a name and claiming ownership of a non-performing asset?
The bottom line is that we should just do things properly and stick to our core business and ensure that all stakeholders have their interests taken care of.
After all, we owe it to our customers to grow or kill the business. It is our obligation to promote best practices to remain afloat.
As always, let’s make money.
Online Reporter