daniel chigunweNqobile Bhebhe
One of Zimbabwe’s fastest growing financial services providers, Mukuru Financial Services, that offers remittance and financial inclusion solutions, has officially joined the Deposit Protection Corporation (DPC), becoming the eighth deposit-taking microfinance institution in Zimbabwe.
This comes after the Reserve Bank of Zimbabwe, recently issued a Deposit-Taking Microfinance Institution licence to Mukuru.
The platforms have revolutionised how people access and manage their finances, particularly in underserved rural areas.
The DPC was established in 2003 to compensate depositors for losses incurred in the event of bank failures in Zimbabwe.
The DPC provides compensation up to a cover level of US$500 as prescribed by its regulations.
DPC said in a communique that the milestone marks a significant development in safeguarding the funds of Mukuru’s customers and enhancing public confidence in the financial services sector.
Mukuru in now the eighth deposit taking microfinance institution to join DPC, alongside 13 commercial banks, four building societies, one savings bank and one development finance institution.
The inclusion of Mukuru Financial Services under the DPC umbrella, means that its customers’ deposits are now protected in the event of the institution going under sequestration.
DPC chief executive officer, Hopewell Zinyau noted: “We are delighted to welcome Mukuru Financial Services to the DPC family. Their commitment to financial inclusion aligns closely with our mandate to protect depositors and enhance public confidence in the financial system. This membership will go a long way in strengthening trust and stability in the sector.”
DPC said the move is expected to further enhance public trust in Mukuru, particularly among individuals and small businesses that rely on its services for cross-border transactions, savings and payments.
With its membership in the DPC, Mukuru joins other financial institutions in working toward a more resilient and inclusive financial ecosystem in Zimbabwe.
Of late, there has been mushrooming of pyramid schemes in the country where people end up losing substantial investments following their collapse.
People also form ‘savings groups’ and contribute cash which is mainly kept at a member’s house.
Members borrow from the fund at an agreed percentage, and some of the groups have cash running into thousands of dollars.
The country experienced at least nine bank failures in the 2000s as many of the newly licenced banks ran into major trouble, often with executives and shareholders becoming major borrowers who later failed to payback the money.
The new banks run properly not only survived the turmoil, but in some cases have become leaders of the sector.
Online Reporter