Research and Markets Logo This report on The Banking Sector in Zimbabwe includes commercial banks, merchant banks and building societies, the central bank, development finance institutions, and other credit granting facilities including microfinancing. It includes the latest available information on the state and size of the sector and factors that influence it such as the change in the currency and inflation.
There are profiles of 24 companies including the Reserve Bank of Zimbabwe, commercial banks such as CBZ and Ecobank, microfinance banks such as GetBucks and development finance institutions including the Infrastructure Development Bank.
The Banking Sector in Zimbabwe 2020
The performance of Zimbabwe’s banking sector is constrained by the economy. The re-introduction of the local currency did not bring economic relief, and exacerbated cash shortages and hampered trade. The decline in the number of banks in the past decade resulted from the collapse of some locally-owned banks and consolidations and mergers to meet new stringent regulatory capital requirements. Bank failures resulted from poor corporate governance, insolvency and imprudent lending activities, exacerbated by low confidence in the banking sector due to high transactional costs and marginal rates on deposits.
Digital Financial Services
Due to the cash crisis in Zimbabwe, the increased use of alternatives for cash transactions has seen most service providers in the public and private sector adopting mobile money and point-of-sale to process payments. These digital channels are now the most common alternative for the country’s unbanked population and the significant informal sector.
Microfinance Institutions
Commercial banks are competing with the increasing number of microfinance institutions that are empowered by government initiatives to improve financial inclusion. Many consumers choose microfinance institutions instead of banks because of more flexible conditions as many accept motor vehicles and other movable assets such as livestock as collateral which is convenient to low-income borrowers. The Reserve Bank’s Microfinance Development Committee was established to develop a microfinance development strategy for financial institutions to serve the low income and marginalised groups.
