THE country’s banking sector has emerged from years of economic turbulence with bad debts firmly under control, buoyed by tighter risk management and early signs of a broader economic recovery that lenders say is strengthening borrowers’ capacity to repay.
The Bankers Association of Zimbabwe (BAZ) says loan write-offs were minimal throughout 2025, underpinned by a low non-performing loans (NPL) ratio of just 2,9%, a level that compares favourably with many emerging and developing economies.
Industry leaders expect the trend to hold in 2026 as improving macro-economic conditions begin to filter through to households and businesses.
“Write-offs in 2025 remained minimal due to sound credit risk management and a low NPL ratio of 2,9%,” BAZ president Sibongile Moyo said.
“We expect this stable trend to continue in 2026, supported by improved borrower capacity from the projected economic rebound.”
For a country long associated with banking instability, depositor losses and currency crises, the figures mark a notable shift.
Zimbabwe’s financial sector has historically borne the brunt of economic shocks, from hyperinflation and repeated currency changes to prolonged recessions that crippled borrowers’ ability to service loans.
The latest data point to a banking system that is more cautious, better capitalised and increasingly aligned with prudential norms.
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Banks have sharpened their focus on lending to productive sectors with more predictable cash flows, including agriculture, mining, manufacturing and infrastructure-linked services.
The improved credit environment also reflects broader macroeconomic stabilisation efforts by authorities, notably tighter monetary policy, reduced inflation volatility and measures aimed at restoring confidence in the financial system.
Moyo said the banking sector continues to play a pivotal role in supporting economic activity, with loans to productive sectors accounting for 76,7% of total lending as of June 30, 2025.
“Aiming to sustain the positive trajectory of 2025, where private sector credit grew by 20% in the first half of the year alone, banks will maintain this focus in 2026. This strategy is designed to underpin the country’s projected 5% GDP growth,” she said.
Moyo said lending rates were guided by the bank policy rate, which was set at 35% in late 2024 to anchor inflation.
“For 2026, with inflation projected to decline to single digits, we project a gradual downward adjustment in lending rates to stimulate long-term borrowing,” she said.
