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<a href="https://www.pindula.co.zw/Nelson_Chamisa/">Nelson Chamisa</a>, the leader of Zimbabwe’s opposition party <a href="https://www.pindula.co.zw/Citizens%27_Coalition_for_Change/">CCC</a>, has expressed concern over reports that banks are no longer providing US dollar (USD) loans in the country. In a statement seen by PindulaNews, Chamisa attributes this development to the “flawed and rigged election” held on August 23, 2023.
The former ICT Minister believes that this situation will have severe consequences for industries, commerce, and the overall economy. Most loans and deposits in Zimbabwe are denominated in USD, indicating a high level of dollarization. If banks indeed stop issuing USD loans, it would isolate the economy from the financial system and lead to its decline. Chamisa said:
<blockquote>
<h3> RIGGING ELECTIONS DESTROYS EVERYBODY AND EVERYTHING EVERYWHERE …</h3>
The recent financial development is very disturbing but it is in itself an indication of the bad politics and flawed government arising out of and from a disputed, flawed and bogus election. I hear that Banks have stopped giving $USD loans. This will have far reaching ramifications on industry, commerce and the economy at large. 
As of June 2023, RBZ reports show that 94% of the loans are denominated in USD while 6% of the total loans were in ZWL. In terms of deposits, 88% of total deposits were in USD while 12% were ZWL. If the USD under the mattresses were deposited into the banking sector, share of the ZWL deposits would be undoubtedly close to 0%. This effectively means that the economy has dollarised. 
In view of this, if the news circulating around which to the effect that banks have stopped issuing USD loans is correct, it simply means that the whole economy is cut off the financial system and its demise is close! 
There is no scope to substitute USD with ZWL because the supply of ZWL is very thin. In addition, with interest rate of 150% per annum, it is not viable to switch to ZWL loans. If the development is true, this situation is as good as taking out oxygen from a living being. 
The chaos which will ensue is unimaginable – 49% of Zimbabwean currently live under extreme poverty. The ensuing economic hardships will likely increase extreme poverty and emigration into neighboring countries. The Zimbabwean economic crisis is now a SADC domestic crisis!
 The country is paying the price to rot in constitutionalism, drought of good governance and a kwashiorkor of leadership! Zimbabwe must return to majority rule, a people’s government and a restoration of fundamental freedoms, rights and democracy. 
Zimbabwe needs a capable, responsible and accountable government #ForEveryone
</blockquote>
The CCC party is contesting the outcome of the August 23, 2023 elections, alleging irregularities observed by local and international monitors. They are demanding new elections overseen by an impartial organization like SADC, the African Union, or the United Nations, instead of the <a href="https://www.pindula.co.zw/Zimbabwe_Electoral_Commission/">Zimbabwe Electoral Commission</a> (ZEC), which they accuse of collaborating with ZANU PF to manipulate the results. However, the ruling ZANU PF party has rejected the idea of a re-run, transitional authority, or national unity government.
<h3><a href="https://www.pindula.co.zw/">More Pindula News</a></h3>

Pindula News

Chamisa Expresses Concern Over Reports That Banks Are No Longer Providing US$ Loans

Local financial institutions have suspended lending in United States dollars following uncertainty around the use of the multicurrency system beyond 2025, reported <a href="https://www.businessweekly.co.zw/businesses-in-quandary-as-banks-suspend-us-dollar-loans/">Business Weekly</a>.
As a result, some local companies have reportedly shelved their expansion projects or retooling initiatives.
President Emmerson Mnangagwa is on record saying the country will ditch the multicurrency regime and revert to the exclusive use of the local currency as the sole legal tender.
Addressing the 9th CEO Africa Roundtable Conference in Victoria Falls recently, Mnangagwa said:
<blockquote>
We must bite the bullet, whether it gives us some suffering for a period, we shall proceed to have our own currency, not a situation where the economy has a regime of currencies in use, we want a single currency and we are going there.
</blockquote>
In June 2022, the Government promulgated Statutory Instrument 118A of 2022, also known as the Presidential Powers (Temporary Measures) (Amendment of Exchange Control Act) Regulations, 2022, amending the Exchange Control Act.
The Statutory Instrument entrenched into law the multi-currency regime for the entire period of the National Development Strategy 1 (NDS1), a five-year economic blue-print adopted by the Government running up to 31 December 2025.
SI 118A of 2022 stipulates that all loans and other debts denominated in foreign currency are to be repaid in foreign currency likewise the loans in local currency.
Previously, borrowers were allowed to repay loans in Zimbabwe dollars at a conversion rate set by the Reserve Bank of Zimbabwe.
Finance, Economic Development and Investment Promotion Minister Mthuli Ncube, recently said the Government’s policy presently was that of a multicurrency regime.
Speaking to journalists during a virtual press conference from Morocco, Ncube said:
<blockquote>
Therefore, beyond December 31, 2025, we are mulling over it, and we will come back on that but whatever we do, we will be sure that we are able to protect business, transactions and jobs.
</blockquote>
The Confederation of Zimbabwe Industries (CZI) president, Kurai Macheza, said:
<blockquote>
It is true that banks are not able to give any more new loans in US dollars. Not only that, but wherever they are getting these lines of credit, it’s also difficult to give a timeline of 2025.
So, as business, we have been talking about this to the authorities, our view is maybe let’s look at extending this to 2030 but obviously, it’s our view the authorities are considering it.
We don’t know how they are going to respond but that is our plea to the authorities we are engaging in.
</blockquote>
Speaking to Business Weekly, an official with one of the leading financial institutions who preferred not to be named said:
<blockquote>
Banks are no longer interested in lending businesses in US dollars because it is not clear what will happen after 2025 in terms of the continued use of the multicurrency system.
</blockquote>
According to the Zimbabwe National Statistics Agency (Zimstat), 80 percent of bank loans in the country were in United States dollars.
The increased lending in United States dollars is attributable to the volatility of local currency and the country’s history of hyperinflation, among other factors.
However, due to the uncertainty around the continued use of a multicurrency system beyond 2025, local banks are hesitating to lend businesses in US dollars.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Banks Suspend US Dollar Loans

Banks have urged the Government to strike a balance in liquidity management saying the current squeeze is negatively affecting companies that buy foreign currency through banks.
At the forex auction conducted on Tuesday, 04 July, foreign currency bidders only accessed just above USUS$500 000 from the benchmark of US$5 million per week.
Speaking in an interview with <a href="https://businesstimes.co.zw/banks-in-liquidity-balance-push/">Business Times</a>, Bankers Association of Zimbabwe (BAZ) chief executive officer Fanwell Mutogo said that financial institutions have run dry. Said Mutogo:
<blockquote>
Liquidity management is essential, but the challenge is to find a balance to keep the economy running.
Yes, we can confirm that ZWL$ liquidity is tight at the moment, however, banks buy forex based on clients’ demands and what it means is that the tight liquidity situation is also affecting companies that buy forex through banks.
We understand the government’s position as regards the liquidity measures which have been implemented given what was happening in the economy, however, we believe the current tight liquidity situation is an unintended consequence of the measures.
</blockquote>
The Confederation of Zimbabwe Industries (CZI) in its latest report, said that the liquidy squeeze will have the unintended consequence of entrenching dollarisation. CZI said:
<blockquote>
This [tight liquidity] is expected to foster demand for the local currency and is in line with the calls from CZI over the years for the need to balance between supply-side and demand-side measures.
Although currently the ZWL$ has been mopped out to leave industry starved of the ZWL$, it is expected that the authorities will take this as a way to have an idea about the actual ZWL$ levels that are optimal for the market.
Excess ZWL$ will cause an exchange rate depreciation while a market starved of ZWL$ might also entrench dollarisation and retard growth. It is expected that the authorities will work out an optimal balance soon.
</blockquote>
However, authorities have vowed to maintain the recently announced tight monetary and fiscal measures that have starved the market of Zimbabwe dollars.
The measures have resulted in the Zimbabwe dollar gaining ground against the United States dollar in the past three weeks.
Economists have cast doubt on the longevity of the stability and described it as “artificial”.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Banks Urge Govt To Restore Liquidity Balance

We encountered some information on Twitter about “flexible and affordable CBZ Diaspora Mortgages” so we got in touch with the bank for more information. 
Here’s the response we got:
<blockquote>
<h2>Housing schemes currently available for sale:-</h2>
<ul>
<li>Nehosho stands/houses – Gweru US$34/m² before vat average size 150m²</li>
<li>Mtausi Park – Gweru US$13/m² before vat average size 2040m² (cash price discounted @ US$11/m²)</li>
<li>Mbizo 21 – Kwekwe US$27/m² before vat average size 320m²</li>
</ul>
Value Added Tax is 14.5%
The bank is also giving mortgage loan to clients who earn in foreign currency. Below are the terms and conditions:-
<ul>
<li>Tenure : 5 years</li>
<li>Interest rate : 12-14% per annum</li>
<li>Administration fees : 1% per annum on reducing balance</li>
<li>Establishment fee : 3% once off</li>
<li>Application fees : USD$100.00</li>
<li>Deposit : 25% of value of property / 10% on Bank projects</li>
</ul>
Maximum tenure for all loans is now at 3 years
</blockquote>
The bank also sent the following PDF which has additional information regarding the mortgages:
<a href="https://zero.pindula.co.zw/wp-content/uploads/2023/02/CBZ-Bank-Mortgage-Finance-Presentation-2023.pdf">CBZ Bank Mortgage Finance Presentation 2023.pdf</a>
CBZ Bank is a subsidiary of the listed financial services group CBZ Holdings. To contact the bank regarding these mortgages, use diasporamortgages@cbz.co.zw
____
A note from Pindula. Are you in the diaspora? Does this sound like a good deal or not? Do you know other diaspora-targeted property or mortgage products that we could share with the Pindula community? Please comment below or send us an email on hello@pindula.com

CBZ Offers Diaspora Mortgages. (PDF Download)

Bank workers are considering industrial action following the recent denial by their employers to pay part of their salaries in US dollars.
The Zimbabwe Banks and Allied Workers Union (ZIBAWU) believes banks have the capacity to pay their workers in foreign currency after the Reserve Bank of Zimbabwe’s (RBZ) Mid-Term Monetary Policy Statement revealed that the banking sector’s profitability increased 12-fold during the first half of 2022. The MPS said:
<blockquote>
The banking sector recorded unaudited aggregate profits of ZW$181.25 billion for the half-year ended 30 June 2022, a 12-fold increase from aggregate profits of ZW$15.09 billion reported in the corresponding period in 2021.
</blockquote>
Speaking to <a href="https://www.newzimbabwe.com/crippling-strike-hovers-above-banking-sector-over-us-salary-portions/">NewZimbabwe.com</a> on Monday, ZIBAWU secretary general, Peter Mutasa, said there is no justification for the banking sector to fail to pay USD salaries considering that a “broke” government is managing to pay part of civil servants’ salaries in US dollars. Said Mutasa:
<blockquote>
Employers are refusing to peg salaries in US$ and also refusing to pay part of the salaries in US dollars.
This is despite the fact that all bank charges and fees are pegged on the US$ and move with the exchange rate.
On our part, we have a clear mandate from the workers that salaries in the sector must be based on US$ and part of it be paid in US$.
Our understanding is that if a broke employer like the government can stretch out and pay in foreign currency, what justification do profiteering banks have to decline the proposals?
</blockquote>
Mutasa said employees in the sector have settled for US$636 with an option to pay 50% in US$ and another portion in Zimbabwe dollars.
But the employers want to pay ZW$295,000 wholly paid in local currency, a development that has pushed the workers to consider picketing. Said Mutasa:
<blockquote>
We have started our consultations, but it is clear we are going to mount serious countrywide pickets and other collective actions permissible by law.
</blockquote>
Currently, the lowest-paid employee in the banking sector is earning ZW$220,000 all-inclusive.

Bank Workers Mull Industrial Action Over USD Salary Component

The Reserve Bank of Zimbabwe (RBZ) and bank executives have been holding a series of crisis meetings in the past few days with the view to finding a lasting solution to the liquidity crunch, reported <a href="https://businesstimes.co.zw/rbz-banks-in-crisis-indaba/">Business Times</a>.
There are concerns that the chronic liquidity crunch bedevilling the economy can potentially hamper the upcoming summer agricultural season.
Senior officials from the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development, are also part of the meetings.
Speaking to Business Times, Bankers Association of Zimbabwe (BAZ) CEO, Fanwell Mutogo, said the crisis meetings are set to continue this week. He said:
<blockquote>
The liquidity situation remains challenging but we are worried more for the farmers as this is the financing period for them.
There are a series of meetings being held among the central bank, banks and Lands, Agriculture, Fisheries, Water and Rural Development ministry and I am sure, we will come up with a solution together.
… Direction is not yet clear on how much money will banks splurge for the new season given the current liquidity challenges.
</blockquote>
Recently BAZ president Mehluli Mpofu warned that if the agriculture sector doesn’t perform well, it will affect other sectors of the economy. He said:
<blockquote>
The 2022/2023 summer cropping season has already kicked off with irrigated crops already planted and with this liquidity squeeze in the market, the desired agriculture growth will be difficult to achieve.
As an agro-based economy, agriculture performance is key to economic growth hence if the sector doesn’t perform well, this will affect next year’s economic projections.
</blockquote>
The Confederation of Zimbabwe Industries president, Kurai Matsheza, also said the liquidity crunch has hindered the funding of agriculture. Matsheza said:
<blockquote>
We are in a serious liquidity squeeze as we are failing to get working capital from the banks and with the agriculture funding being delayed the shortages of the raw material will persist in the long run as the farmers should have completed some preparations but they are yet to do so due to the liquidity crunch.
</blockquote>

RBZ, Banks In Crisis Meetings

President Emmerson Mnangagwa said that most Zimbabwean banks are flouting the country’s laws in their operations.
Writing in his column in The Sunday Mail, Mnangagwa said only 5 out of 16 deposit-taking institutions passed the integrity test. He said:
<blockquote>
Today, I can share with the nation that out of the 16 deposit-taking institutions we have in our economy, only five passed the integrity test, with the rest having been involved in activities that ran contrary to the terms of their operating licences. Punishments have since been meted out.
Let no one ever think that my administration will flinch from, or hesitate to take corrective action, however drastic.
In addition, the size of offenders means nothing to us; we will come for you once you dabble in the unlawful and unethical.
No one player is stronger than the government; or above punishment.
</blockquote>
<h2>We Are Watching Them</h2>
President Mnangagwa said the “greedy and devious economic actors” attacked the country’s mobile banking platforms before moving to the financial sector but the government is keeping an eye on them. He said:
<blockquote>
The fight against economic destabilisation began with a determined crackdown on errant actors in the mobile telecommunications industry.
Actors in this sector had taken advantage of clear legal lacunae, and of our desire to use mobile platforms for financial inclusivity, to cause mayhem in financial markets.
We acted against them. We continue to watch them so their actions and conduct remain proper and lawful.
</blockquote>
More: <a href="https://www.newsday.co.zw/2022/08/zim-banks-have-gone-rogue-ed/">NewsDay</a>

5 Out Of 16 Zim Banks Passed The Integrity Test - ED

The Reserve Bank of Zimbabwe (RBZ)’s Financial Intelligence Unit (FIU) has accused some banks of engaging in the illegal purchase of foreign currency on the parallel market.
FIU now intends to conduct an audit into accounts used by banks in the so-called illicit forex dealings.
FIU director-general Oliver Chiperesa’s correspondence to banks dated 11 May 2022, reads:
<blockquote>
<h2>Directive to disclose suspense and other internal accounts</h2>
1. The Financial Intelligence Unit has noted that some banks may be using suspense and other internal accounts under various descriptions for purpose of purchasing foreign currency on the parallel market. In the result, we intend to carry out an audit of such accounts
2. To facilitate the planning of the audit, every bank is required to furnish to the Financial Intelligence Unit, a list of all the bank’s suspense accounts and other internal accounts used by the bank for its own transactions. The information should be provided to the FIU by no later than Friday 13th of May 2022
3. Subsequent to receiving this information, the FIU may request detailed bank statements for all or some of the accounts. The FIU will take a serious view of a failure to disclose any particular account as requested therein.
May you be guided accordingly.
</blockquote>
<h4>More: <a href="https://news.pindula.co.zw/">Pindula News</a></h4>

RBZ To Audit Bank Accounts Over Alleged Illicit Forex Dealings

RBZ has issued the following statement in regards to  how banks, payment services providers and microfinance should operate during the lockdown:
<blockquote>Following the announcement by His Excellency, the President, of a 21-day lockdown effective 30 March 2020, all banks, microfinance institutions and payment service providers will be required to provide limited essential services as follows:
a) Providing uninterrupted access to online banking and payment services, including point of sale, international transactions, RTGS, mobile banking, mobile money payments and remittance services, to promote crowd containment and social distancing;
b) Issuing appropriate communication to customers on available electronic delivery channels;
c) Suspension of all increases In bank charges on electronic transactions, including those that had already been communicated to customers, but not yet effect.
d) Utilising information technology to ensure social distancing when delivering services and interacting with stakeholders
e) Maintaining records of all persons who may, in exceptional cases of emergency, physically access a bank/branch and to facilitate tracing of such persons, should the need arise
f) Activating business continuity and contingency plans, including call centres to deal with issues, as they occur
g) Promoting high standards of hygiene to mitigate against any possible transmission, including disinfecting surface areas, providing alcohol- based hand sanitizers, running water and soap for staff and customers; and
h) Closely monitoring developments and responding accordingly.
2. For the avoidance of doubt, bank branches, agencies, banking halls and bureaux de change will be closed. However, arrangements may be made, in exceptional cases of emergency, to physically visit a bank.
3. It is advised that the Bank’s communication of 27 March 2020 regarding publication of financial statements and submission of other reports to the Bank Supervision Division will continue to apply. However, loans and deposits returns should be submitted fortnightly instead of weekly.
The Bank remains available to provide the necessary support for delivery of the limited essential banking services during the lockdown period.
P.T. Madamombe
For Registrar of Banking Institutions</blockquote>

FULL TEXT: Banks, Payment Service Providers And Microfinance To Offer Limited Essential Services During The Lockdown

The Zimbabwe Banks and Allied Workers Union (Zibawu) has accused financial institutions of exploiting workers through low wages. The workers also accused the institutions of ripping off clients through high bank charges. Speaking to New Zimbabwe, Zimbabwe Congress of Trade Unions (ZCTU) president Peter Mutasa said,
<blockquote>
Banks are making super profits yet we are hearing that NMB has recorded a 155 percent increase in profits for the half year, CBZ charging up to 15 percent interest rates. Many workers are losing homes, assets and properties because of banks.
Why is it that banks are making money when everyone else is struggling? We are fighting for the workers because banks are not increasing salaries. It’s been five years and no salary increase in most banks and in those five years, they have been making money. Tomorrow (Friday) we will be demonstrating at the People’s Own Savings Bank (POSB) headquarters.</blockquote>
More: <a href="https://www.newzimbabwe.com/bank-workers-in-protest-over-poor-wages-high-bank-charges/" rel="noopener" target="_blank">New Zimbabwe</a>

Workers Accuse Banks Of Exploiting Customers And Paying Slave Wages

Deputy Minister of Finance and Economic Planning Terrence Mukupe has called on banks to relax the stringent collateral requirements for entrepreneurs in order to allow business to grow. Speaking at the 2018 Zimbabwe National Chamber of Commerce Mashonaland Region Awards, the Minister said,
<blockquote>The issue of collateral by banks is overrated. I am calling on local banks that if we are to properly empower entrepreneurs, they have to revisit the issue of collateral and the way they approach their loan books. If banks are not extending debt and lines of credit to businesses because the entrepreneurs lack collateral, how do you expect business to grow? Look at the tobacco sector, the country managed to resuscitate it without any demands for collateral by contractors.</blockquote>
More: Financial Gazette

Collateral Is Overrated, Banks Must Remove Collateral Requirements For Entrepreneurs: Minister

<blockquote>NMBZ Holdings’ profit before taxation for the year ended 31 December 2017 was $13 017 690. Profit after tax was $9 938 826, an increase of 96 percent over last year’s after tax figure of $5 058 166.
Its banking subsidiary, NMB Bank, achieved a capital adequacy ratio of 24,26 percent. The minimum required by the Reserve Bank of Zimbabwe is 12 percent. NMB’s regulatory capital was $61 135 389, well above the minimum required regulatory capital of $25 million.
Operating expenses increased by five percent from $26 176 706 in 2016 to $27 578 347 last year, as a result of non-recurrent staff expenses.
Briefing analysts on the group’s results, NMBZ chief executive Ben Washaya attributed the increased profit to an increase in income from transactional fees and a significant reduction in impairment losses on loans and advances.
Impairment losses on loans and advances amounted to $3 853 149 compared to $8 059 726 the previous year.
He pointed out that last year was characterised by nostro funding challenges, cash shortages, company closures and job losses, which put pressure on the bank’s lending.
Interest income was adversely affected by the capping of 12 percent per annum as the maximum interest rate banks could charge borrowers in the productive sectors of the economy.
“However, it was good for the economy,” he said.
He said the positive financial results were largely driven by the bank’s broadening of its target market, migration to digital channels, stricter credit underwriting standards and concerted efforts to contain non-performing loans and operating expenditure. 
The bank upgraded its core banking system and other electronic channels. It launched a mobile point of sale machine (mPOS) largely targeted at the SMEs and informal sector.
Draw down on its lines of credit was limited by the need to reserve the funds for exporters, who have foreign currency generating capacity to support repayments.
Shareholders’ funds and shareholders’ liabilities stood at $65 651 843 compared to $55 600 406 in 2016. 
The board declared a dividend of 0,36 cents per share, Mr Washaya said.
Mr Washaya said there had been a nationwide blitz to acquire low cost accounts in order to promote financial inclusion. 
He said the non-performing loans ratio was 7,98 percent, compared to 10,69 percent the previous year. He expressed satisfaction that the ratio had come down to a single digit figure. He said the bank was targeting five percent by the end of 2018.
“We will continue to promote our mortgages and leasing products to assist individual customers to own or improve their homes and enable companies to retool,” he said.</blockquote>

We Made $10 Million Profit In 2017, NMB Announces

The International Monetary Fund (IMF) has warned that banks in Zimbabwe are facing insolvency due to the fact that the volume of Treasury Bills (TBs) and electronic money transfers were increasing without being supported by cash reserves.
The IMF said:
<blockquote>[Government was spending] …the borrowed funds by crediting bank accounts of the payment recipients (employees, suppliers, contractors) through the real time gross settlements (RTGS) electronic system.
These transactions increase deposits in the banking system, but without a concomitant increase in the quantity of US dollars available in cash or external (nostro) accounts. To finance the remainder of the deficit, the government issued T-bills, mainly acquired by commercial banks but also used as payment for services.
…On average, the industry could lose up to 15 percent of its capital base (about 1 percent of GDP) for every 10 percent discounting of T-bills, with domestically-owned banks at higher risk. Additional losses could arise from the discounting of RTGS balances.
Changes in accounting rules requiring the valuation of assets to market could bring forward the realisation of these losses</blockquote>
More: <a href="http://www.financialgazette.co.zw/zimbabwean-banks-face-solvency-crisis/">Financial Gazette</a>

Banks facing insolvency due to increases in TBs and Electronic Money not supported by cash: IMF warns

Finance Minister Patrick Chinamasa has said that banks should lend money to farmers and to the private sector, as the government had absorbed almost one billion dollars in bad debts from the banks.
Speaking at a Command Agriculture workshop, Chinamasa said:
<blockquote>I must say banks have no excuse not to lend to farmers and the private sector. We have taken nearly $1 billion of their bad debts from their balance sheet. We have cleaned their balance sheet in order to whet their appetite for more lending to the productive sector including agriculture
Those bad debts are now to government through a company that we formed. So, they have no reason not to lend to the productive sector including agriculture.</blockquote>
More: <a href="https://www.newsday.co.zw/2017/06/08/no-reason-banks-not-lend/">NewsDay</a>

Banks have no excuse not to lend to farmers and the private sector - Chinamasa

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