“There are 28 financial institutions operating in Zimbabwe right now and according to last year’s figures, $2,3 billion is in banks right now from customers,” said Clement Kahiya, Kingdom Financial Holdings Limited (KFHL) Group Projects, Business Development and Marketing Executive, last week.
“However, $2,5 billion is in the informal sector – which means that there is more cash in the informal sector than in formal banking. It seems people do not trust local banks right now because there are many things that they do not like about banks.”
Kahiya, who has worked in Malawi and Zimbabwe and as an Information and Communication Technology (ICT) specialist, says in Malawi, on the other hand, there is a low literacy rate, but citizens bank their money because they “trust their financial institutions”.
He said the major reason why Zimbabweans do not bank their money was the fact that it is very cumbersome to open an account there is too much paper work for one to do so”.
“When one opens an account it is inaccessible and the banking services are also inaccessible because in some areas there are no banks at all. People also do not bank their money because the bank charges are very high right now and some of them are irrelevant.
Kahiya said in most cases banks cannot provide the required services because of the high level of costs involved if the traditional banking methods are used.
“Zimbabwe has high ICT skills and people must give solutions to banks,” Kahiya said.
“It is very funny when we train our staff and then they leave us at Kingdom Bank only to return as expatriates, demanding more cash because they are now treated as experts in their fields. We now have to fly them to The Victoria Falls using our own money in order to entertain them – yet they were our members of staff.
Kahiya said Zimbabwe needed to re-examine the relationship between ICT and the financial sector.
“There is need for collaboration instead of competition between ICT companies and mobile network operators, banks and other businesses in Zimbabwe.”