The National Social Security Authority (Nssa) is in yet another banking adventure after government this week announced a board of directors for its planned building society expected to be licensed soon.
The social security provider’s fresh attempts for a banking venture comes barely two years after sinking and losing US$50 million of pensioners’ funds in a botched attempt to rescue Patterson Timba’s Renaissance Merchant Bank (RMB).
Despite attempts to save RMB, including rebranding the bank to Capital Bank with the hope of distancing the entity from mismanagement and abuse of depositor’s funds, the bank went under in 2014 with millions of Nssa’s funds.
The Capital Bank case is just but one of Nssa’s questionable banking investments.
Nssa also lost about US$16 million in other banks that have been shut down. It had US$15 million deposited with Interfin Banking Corporation, which closed down in 2012 after gross abuse of depositors’ funds was unearthed. The authority also owned 10,02% of Interfin Financial Services, the parent company of Interfin Banking Corporation.
Nssa had more than US$750 000 in Genesis Bank, which collapsed in 2012.
Labour minister Prisca Mupfumira announced the social security provider is to invest more than US$50 million in what she referred to as the Social Security Building Society. This is despite the fact that it owns 35% of FBC Holdings, parent company to FBC Bank and FBC Building Society.
Mupfumira said the bank was close to getting its operating licence from the Reserve Bank of Zimbabwe.
She also announced a nine-member board of directors as one of the last few legal licensing requirements.
“In line with the Building Society Act, a building society structure requires a competent board of directors who are qualified, knowledgeable and experienced. It is a registration requirement that when a building society requires a license, it must have a CEO and managing staff (and) in terms of good corporate governance, a board of directors must be put in place to recruit this executive officer,” Mupfumira told journalists on Monday.
The board is chaired by Gamaliel Bwanya who is deputised by Precious Sibiya.
Other board members include David Mnangagwa, Jean Maguranyanga, Nimrod Chiminya, Tinotenda Kambasha, Sibusisiwe Bango, Josephine Ncube and James Matiza.
The idea for a building society was born as part of attempts to provide non-monetary benefits such as decent accommodation to civil servants through a micro-finance institution, said Mupfumira.
Mupfumira said during consultations in government and with the central bank. It was recommended that a building society would be more ideal to implement the housing initiative.
She said a US$50 million fund has been set aside from excess cash in Nssa to fund housing.
Despite Nssa’s ill-fated experience in banking, both as a client and investor, it seems Zimbabwe’s banking sector has problems of its own.
The central bank has since the introduction of the multiple currency regime in 2009 put a number of banks under curatorship amid hopes the financial institutions could be saved, but it has resulted in liquidation.
Other banks have eventually surrendered their licenses for one reason or the other.
In November last year, Tetrad Investment Bank was suspended by the RBZ from undertaking banking activities after failing to secure investors to turn its fortunes from a negative US$19,7 million capital position as at September 2014.
Interfin Bank was later put under liquidation after a four-year curatorship period.
In the first week of January 2014, Transport minister Obert Mpofu’s Allied Bank also surrendered its operating licence.
In February, AfrAsia, formely Kingdom Bank, was shut down.