JOHANNESBURG The local banking sector is struggling to win back the confidence of the public after years of hyperinflation that discouraged Zimbabweans from keeping money in banks where it would instantly lose value, according to Kingdom Stockbrokers. In a report last week Kingdom said the lack of significant credit lines had resulted in thin liquidity in the marketThe local banking sector is battling to regain public confidence that was lost during the protracted period of hyperinflation the nation experienced that rendered savings in interest bearing assets unrewarding. During that period, the public painfully saw the value of its savings being eroded by the highly taxing macroeconomic conditions, said Kingdom.
It added: The lack of significant credit lines on the sector from regional and international financiers has also contributed to thin liquidity on the sector, making it challenging for the banking sector to advance meaningful volumes of credit to industry.
The stock broking firm said maximum withdrawal limits on clients imposed by the regulatory authorities also eroded the little confidence the public had in the sector.
It said: The aforesaid has culminated in a slow growth in deposits across the banking sector whose deposit base was estimated to be around US$350 million as at the end of the month of April.
The sector however remains optimistic that as the economic performance picks up as indicated by increasing productive capacity on industry; liquidity will also improve on the economy.
Inflation, once described by Mugabe as Zimbabwes number one enemy, had come to symbolise a dramatic economic and humanitarian crisis also seen in acute shortages of food and basic commodities, amid a cholera epidemic that infected nearly 100 000 people and killed more than 4 000 others.
Analysts see the unity government as providing the best opportunity to revive Zimbabwes economy once held as a model for other African countries.