‘Mobile banking will attract money circulating outside formal system’

institutions to attract the US$2,5 billion circulating outside the banking system.
According to the Zimbabwe Economic Policy Analysis and Research Unit (Zeparu) Economic Barometer, about US$2,5 billion is circulating outside the banking sector.

As of June, deposits in the banking system stood at an estimated US$2,6 billion.
About 60 percent of Zimbabwe’s economy is made of the informal sector which seldom uses banks to conduct transactions. BAZ president Mr John Mushayavanhu told New Ziana that most banks now had the capacity to lure money circulating outside the system.

“Banks have introduced new products such as mobile banking services for those who can not access the institutions,” he said.
“This now means that banks can tap into the US$2,5 billion, which is circulating outside the banking sector,” he added.
Mr Mushayavanhu dismissed claims that most people were shunning banks because of low interest.

“The problem with depositors is that they deposit their money for a short period and expect a large return. If you deposit for a day, you will not earn a substantial interest, but if you lodge your money at a bank for at least 180 days, you will get a favourable deposit interest,” he said.
Banks charge deposit interest rates between five to ten percent for 30 days and ten to twelve per cent for 60 days. – New Ziana.