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Bianca Mlilo Business Reporter
THE Reserve Bank of Zimbabwe has granted the National Social Security Authority (NSSA) the greenlight to operationalise its new banking unit, the National Building Society. In a notice the central bank said it approved the operation of the new banking unit with effect from April 27, 2016. “It is hereby notified that National Building Society Limited has been registered and authorised in terms of the Building Societies Act [Chapter 24:02], to conduct building society operations effective April 27, 2016,” said RBZ.
The bank is aimed at strengthening the authority’s portfolio and offering non-monetary incentives in the form of affordable housing loans for civil servants and low income earners. The initiative has excited many who expect the new bank to offer affordable loans at favourable terms.
The building society was initially supposed to commence operations in August last year and kept being postponed with the parent Ministry of Public Service, Labour and Social Services citing some technicalities that needed to be addressed first.
RBZ said the building society had registered and adhered to regulations governing its areas of operation. Initial reports indicate that about $50 million is expected to be injected as seed capital for the new bank.
In a recent report to Parliament, Public Service Minister Prisca Mupfumira said NSSA has a total balance sheet of $1.3 billion with investments composed of $292 million to real estates developed and undeveloped properties, $164 million shares in listed and non listed companies, $102 million invested with banks and $90.4 million invested in prescribed assets.
These investments, she said, were generating a total income of $23.5 million, being interest income of $10.5 million, rental income of $7 million and dividends $6 million. Mupfumira, however, said the investment income performance of NSSA was very poor and tasked the board to recruit qualified leadership to properly manage the pensioners’ fund.
Among the properties that have attracted public criticism is the 136-bed Beitbridge Hotel, which cost the authority $45 million from an initial budget of $7 million. Also Celestial Park in Borrowdale, which cost the authority $32 million in purchase price and $3 million in other costs against a valuation purchase price of $25 million at the time.
Lands in Mutare, Victoria Falls, Gweru, Bulawayo and Kwekwe, which were repossessed or had defective titles, are valued at an estimated $50 million. The report says a total of $52 million was lost in a number of failed local banks while more than $35 million was lost in closed companies.
The submission of a bankable plan by NSSA to the RBZ comes after monetary authorities tightened regulations for new entries into the financial sector to consolidate the prevailing stable conditions for banks.
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