Zimbabwe:Bank branches closure stifling financial inclusion

THE Reserve Bank of Zimbabwe (RBZ) says the closure of bank branches in remote areas is working against financial inclusion plans and implored institutions to adopt the agent banking model.

Speaking at the pensioners’ stakeholder consultative conference in Harare, RBZ banking supervision division deputy director Audrey Hove said there were a high number of underserved people in Zimbabwe and to address that, banks should opt for the agent banking route.

“Banking institutions are closing branches and a lot of banking institutions are moving away from the remote areas. I travelled to Mutare and I was shocked to find that there is no Standard Chartered Bank [branch] in Rusape,” she said, adding that the central bank had already approved the agent banking model.

Hove said the number of agent bankers in the country had more than doubled from 3 000, which were previously recorded, with most of these agents operating in churches and supermarkets.

She added that RBZ was working with various stakeholders to put in place a five- year strategy to grow financial inclusion in the country.

“In the strategy, we have set specific goals to reach 90% by 2020, to have 90% of our population to, at least, be able to access banking services. Financial inclusion is about looking at those at the lower end of the market,” Hove said.

She said RBZ was working with banking institutions to put in place products which can tap at the end of the market.

“We are encouraging banks to put in place accounts which require fewer fees and with know-your-customer requirements, which are minimal. In most cases, people bank because they are employed and they want to be able to access their payments,” she said.

Hove said access to financial services was not adequate and there was need for access to insurance and pensions services, saying the access should be available from all corners of the country.

She said RBZ was urging pensions and other banks to partner with mobile network operators to make use of mobile money for easy access to their finances.

“We are also encouraging the use of plastic money. As Zimbabwe, we were used to having money in the wallet, but that comes with a lot of challenges because of the challenges the country is facing and due to these challenges, the uptake of plastic money has increased,” she said.

Speaking at the same event, in a speech read on her behalf, Public Service, Labour and Social Welfare minister Prisca Mupfumira said delayed pay dates were not peculiar to pensioners only, but to all the civil servants, and government was making efforts to address and normalise the situation.

Mupfumira said in the past, several meetings were convened with staff associations’ representatives in trying to address the issue of the shift of pay dates caused by a reduction in revenue flow, which the nation was currently experiencing.

“It is understood that staff associations also represent your interests, but, however, it has been observed that information regarding pay dates sometimes is not conveyed timeously to pensioners and this has been communicated to workers’ associations to rectify,” Mupfumira said.

Employers’ Confederation of Zimbabwe president Josephat Kahwema said pension nexus was the major anchor of social and economic stability in all efficient economies and it was the major source of investment funding and provides the baseline social safety net.

He said the baseline social safety was the major driver of aggregate demand, which is the major locomotive force for economic activity.
Pensions, therefore, drive national economic activity.

“This is a serious current challenge. Employers are having difficulty in meeting current net salaries and there is usually nothing to transfer to the pension funds. Employers want vibrant pensions funds and regret the circumstances that are making them complicit in letting the funds down,” Kahwema said.

He, however, said employers were cognisant of the need to build up pension funds because they were the major beneficiaries.

SOURCE:NEWSDAY