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Nelson Gahadza Senior Business Reporter
The Reserve Bank of Zimbabwe (RBZ) has said financial innovation is a key enabler for the growth of the banking sector with the Covid-19 pandemic having taught perceptive financial institutions the critical importance and benefits of innovation.
Zimbabwe, as part of efforts to curb the spread of the pandemic, effected a series of lockdowns among other necessary restrictions that meant companies had to conduct their businesses through online platforms.
The banking sector was ready to trade under such conditions and had to innovate in order to continue providing financial services with minimal physical conduct.
Mrs Rachel Mushosho, the RBZ deputy director, bank supervision, in a presentation at the 2022 Banks and Banking Survey Awards ceremony yesterday said while banks continue to innovate, consumer protection remains important.
“Financial innovation is key in the banking sector. The players should come up with customer-centric financial products that are not just about the number of accounts, but how they can improve the generality of Zimbabweans,” she said.
She noted Zimbabwe’s banking sector has remained sound despite the effects of Covid-19 and the challenging operating environment.
Mrs Mushosho added that ramping up financial inclusion would cast the net wider for the banking sector, pointing out it is not just an issue for the central bank, but that “everyone has a responsibility of driving financial inclusivity”.
“It’s not sufficient to just have access to a banking account; the question is if you have a bank account, are you using it?
“We are trying to link up the financial inclusion strategy to the global context as Zimbabwe is a signatory to the 2020 sustainable development goals (SDGs),” she said.
She noted that the central bank has also linked its national financial inclusion strategy (NFSI) to the National Development Strategy 1, (NDS1), as NDS1 sets the agenda for growth.
“We are about to launch NFSI 2. On NFS1 our information systems were based on finscope surveys that were done in 2012, 11, and 14 and by the time they came out, the information was outdated.
“However, under FMSI 2, we want to come up with evidence-based statistics, and we have commissioned two surveys with the assistance of the World Bank,” she said.
Mrs Mushosho said while the banking sector has remained sound, the RBZ appreciates the work the banking sector does to ensure the economy continues to run irrespective of challenges that we are facing in the economy.
She said currently, the bulk of the banking sector deposits is transitory. She said the sector’s average capital adequacy ratio is above the minimum requirement while the non-performing loans (NPL) ratio is at 1,5 percent against an international benchmark of 5 percent.
“The banking sector has made progress to meet the minimum capital requirements, where we are still having challenges are the deposit-taking microfinance institutions whose date of compliance has been extended to December 31, 2022,” she said.
Bankers Association of Zimbabwe (BAZ president Mr Mehluli Mpofu, speaking at the same event, said the number of banking sector accounts have been growing over the years as the banks continue to widen product offering and improve access.
He said the number of accounts was 1,5 million in 2016 and grew to 2,6 million in 2017, before reaching 5,9 million in 2021.
Mr Mpofu noted that the Covid-19 pandemic coupled with the hyper inflationary environment resulted in an improvement of e-service offerings within the sector.
Online Reporter