HARARE Despite the increase in the number of banks in Zimbabwe, the countrys economy is far from being over-banked, according to the Bankers Association of Zimbabwe (BAZ).Some economic analysts have said the number of banks in the country is outweighing its economy; this follows the re-opening of Royal Bank last week. The re-opening of Royal Bank brings the number of commercial banks in the country to 17 and the total number of banks to 29.
The banking market is okay as it is, it is not over banked. You can only say that when every Zimbabwean has got a bank account. Each and every bank that opens already has a target market that they want to do business with, the informal sector has not been penetrated hence we cannot say the economy has an over banked market, said BAZ president, John Mushayavanhu.
According to an official at Kingdom Financial Holdings subsidiary Micro King Finance, more than 90 per cent of entrepreneurs in the informal sector have no access to banking facilities at all.
In cases where the operators have access to financial institutions, most have no collateral and therefore are unable to secure loans from banks, said the official.
However, some economic analysts insist that the economy has an over banked market.
The Zimbabwean economy is too small when compared to countries like South Africa and UK, yet 95 per cent of their banking business is catered for by at least four or five banks, said Harare-based economic analyst, John Robertson.
He added that there was need to encourage banks to merge so as to manage the number of employees and increase their revenue base.
Post published in: Economy