'Zim saving culture dead'

HARARE - Zimbabweans must re-establish the saving culture and also practice trading on the stock market, the Securities Commission of Zimbabwe
(SecZim) has urged.

This comes as most Zimbabweans — earning way below the poverty datum line and consumer basket of around $588 per month — are failing to save as they lead a hand-to-mouth lifestyle.

SecZim’s chief executive Tafadzwa Chinamo told a parliamentary workshop last week that government had to provide relevant legal instruments that protect the savers and also make the environment conducive for saving.

“Every saving, no matter how little, counts,” he said.

“Saving is not about storing money in droves and then realising that you have saved.

“Instead it is about sacrifice… so despite the situation, anyone can save. If one saved R5 per month it will certainly amount to a lot after 365 days,” he added.

Speaking at the same occasion, the Zimbabwe Stock Exchange (ZSE)’s chief executive Alban Chirume concurred with Chinamo, saying “all investments count”.

“The ordinary person may not realise how important saving is as most claim they cannot afford it,” he said.

“The stock exchange is not supposed to be a mysterious place for people with spectacles and advanced education, anyone can trade there,” the former SecZim boss said.

This comes as Sanderson Abel, a senior economist with the Bankers Association of Zimbabwe (Baz), said “savings are important in any economy as they are the main funding source for sustainable growth in any economy”.

Abel said a major drawback that hinders saving is the lack of products suited for the mostly disadvantaged society.

“The majority of the poor have been found to be financially excluded and characterised by lack of access to formal banking services, credit facilities or savings instruments,” he said.

“Bringing the largely ignored missing market into the formal financial system would enrich and strengthen the savings portfolio in an economy such as the Zimbabwean one,” Abel said.

Early this year, Agribank chief executive Sam Malaba said Zimbabwe’s banking sector deposits were stagnant at $4 billion in 2013, indicating tightening liquidity conditions.

According to Malaba, also Baz president, about 80 percent of the deposits remained short term and transitory and many Zimbabweans do not have faith in the banking sector.

Baz has commissioned a study to ascertain the amount of money circulating outside the banking system, which is estimated to have increased to as much as $7,4 billion.

While initial approximates put the figure at around $2 billion, it is believed the unbanked money has increased since dollarisation in 2009 with transacting platforms such as mobile money transfer services fuelling the growth.

Market observers contend that the situation is exacerbated by loss of confidence in banks following the 2007-8 financial crisis which saw depositors losing their banked money.

Also, prior to the dollarisation — under which Zimbabwe adopted a multi-currency system dominated by the US dollar — the informal sector flourished as unemployment rose resulting in money trickling out of the formal system.

Comments (4)

It's amazing how the banking and finance sector expects Zimbabweans to just capitulate and start trusting them from nowhere, when they as a sector have not done anything to earn that trust. For instance, look at the disparity between the interest charged on loans and the interest they give, if at all, to depositors (virtually none). Look also at the various charges, i.e charge for opening an account, charge for depositing money into that account, charge for withdrawing money from that account, fixed monthly charge for just maintaining the account even though no transactions have been made in that particular month, charge for plastic cards, charge for every transaction where the cards are used e.t.c. The net effect is that $100 deposited today is eroded a few months down the line. In other words, money deposited in a bank shrinks as the months go by rather than growing. Try and borrow a little, based on your account balance and you are made to pay punitive interest rates, that is if at all they approve your application. Do you get any interest from your savings...? Hardly anything to write home about. Try and withdraw a considerable lump sium and you encounter all sorts of problems.... not enough cash in the bank.....you withdraw in phases (to suit them), rather than make one instant withdrawa l(that suits you). In the meantime the bank officials award themselves high salaries and buy expensive, top of the range vehicles. They give themselves and their cronies cheap "insider loans" which they deliberately fail to pay back. Months down the road, the bank is in a liquidity crisis and faces foreclosure. Which sane Zimbabwean would want to put his/her money in a bank given the above ?

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