Sibongile Moyo (SM), managing director at Nedbank Zimbabwe, recently assumed the role of president of the Bankers Association of Zimbabwe (BAZ), taking over from CBZ Holdings CEO Lawrence Nyazema. Moyo steps into this influential position at a critical juncture for Zimbabwe’s financial sector, as banks navigate currency shifts, exchange rate uncertainties, and public scrutiny over high fees and perceived profiteering. In this wide-ranging interview, senior reporter Freeman Makopa (FM) sits down with Moyo to unpack the realities facing the banking sector. She responds candidly to concerns about ballooning profits, tough lending conditions, and how Zimbabwean banks are adapting to a rapidly changing policy and economic environment.
FM: What is your vision for the banking sector?
SM: A stable banking sector supported by a consistent and transparent policy matrix that is aligned to international best practice vis-a-vis anti-money laundering (AML) and FATF compliance and full compliance with Basel III standards, which emphasise capital adequacy, risk management, and liquidity coverage. The RBZ (Reserve Bank of Zimbabwe) instituted minimum capital requirements as a prudential measure to enhance the resilience of the banking sector and mitigate the risk of systemic crises, such as the bank runs experienced between 2003 and 2008. All of the above create a conducive environment that helps attract increased investment into the broader economy through the banking sector.
FM: There is a perception that banks are making super profits in a distressed economy
SM: Banks are required to publish their results twice a year by law and those publicly listed publish quarterly, aiding transparency. In line with international best practice, banks are increasingly providing enhanced disclosures on societal impacts and corporate social and environmental investments. Whilst published profitability numbers look huge, a lot of that can be attributed to revaluation gains, rather than actual cash profits, due to hyperinflation accounting in prior years when we experienced local currency volatility.
FM: Some say the current interest rate regime unfairly protects banks. Your thoughts?
SM: The current interest rate policy stance is in place to build confidence around the stability of the local currency and minimise speculative borrowing whilst at the same time providing concessionary lending windows for productive sectors through facilities such as the TFF (Targeted Finance Facility) by the RBZ. Lending for bona fide business transactions and the productive sector continues in earnest and the banking industry supports this.
FM: Why does it appear that banks favour investing in speculative instruments over funding long-term industry or agriculture?
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SM: The nature of deposits and funding in the economy is currently short-term and transitory, composed mainly of demand deposits. This makes it difficult for banks to advance long-term loans and run tenor mismatches over prolonged periods while concurrently meeting client daily demand payments. Access to offshore lines of credit becomes important to help supplement the longer-term funding needs of the economy for three to seven years. However, due to perceived country risk and currency risk, these offshore lines of credit tend to be exclusively for exporting businesses and can come with high costs and demands for offshore parent guarantees from local companies. The above has left limited long-term funding options available for domestic industries with no export products and services.
FM: How is the banking sector responding to policy inconsistencies and uncertainty around the exchange rate?
SM: The local currency has exhibited relative stability since September 2024, underpinned by a consistent and credible policy environment, which has made it easier to plan. Since 2024, the banking sector has remained aligned with the RBZ mandate to maintain monetary and price stability through a hawkish monetary policy stance. The market has been characterised by tight liquidity and elevated interest rates which have contributed to anchoring inflation expectations and stabilising the exchange rate.
FM: Why are bank charges in Zimbabwe among the highest in the region?
SM: The central bank introduced measures to regularise charges by implementing exemption thresholds on bank and transaction charges as mandated by the 2024 monetary policy statement of April 5, 2024 and subsequent changes made through the mid-term monetary policy review statement of August 2024. These regulations were operationalised through Circular No.1-2024/BSD and Circular No.2-2024/BSD, respectively. These include: exempting all individual and SME accounts maintaining a balance of US$100 and below, or the equivalent in ZiG, from bank charges, and exempting all transactions of amounts less than US$5, or the equivalent in ZiG, from transactional charges. These measures have provided significant relief to the banking public in terms of bank charges and transaction fees with concomitant reduction in banking sector revenues.
FM: With more people preferring US dollar accounts, is the dual currency system sustainable?
SM: Whilst the first quarter of the year saw an increased incidence of dollarisation in the economy, we have in this second quarter seen the market embrace the local currency with more transactions being settled in ZiG. We believe it is important to support policy measures around local currency stability while maintaining a sustainable mix of foreign currency and local currency utilisation in line with the country’s dependence on foreign markets through imports and exports.
FM: What is being done to restore confidence in local currency deposits?
SM: The current practice of clear separation of accounts and assets by currency should minimise this risk at bank level. The RBZ is playing a pivotal role in restoring public confidence in the local currency by backing it with foreign exchange reserves and precious minerals. This strategic approach reinforces the credibility of the monetary system and signals a commitment to currency stability and assurance of value retention and monetary integrity.
FM: Yet banking fees and charges continue to rise. What is your response?
SM: BAZ encourages fair market conduct which includes fair pricing, and through the RBZ, charges and fees are monitored and approved to ensure stakeholders are not being exorbitantly charged. Recent policy measures by the RBZ have mandated exemption for monthly bank service fees for accounts with balances below US$100 and exemption of transaction fees on all banking transactions for US$5 and below. These measures have provided significant relief to the banking public in terms of bank charges and transaction fees.
FM: How is the sector managing non-performing loans (NPLs)?
SM: Prudent lending techniques enable banks to identify areas of weakness and help businesses to guard against these, coupled with close monitoring of accounts and a proactive approach on management of excesses and arrears. Where the environment shifts significantly affecting loan performance, banks enter into bilateral arrangements with borrowers to restructure facilities, in need so that all stakeholders are not negatively impacted. Continuous engagement with businesses and information sharing from market observations and market intelligence are critical to the credit relationship management process.
FM: With the rapid rise in mobile and digital transactions, how is the sector addressing cyber risks?
SM: We encourage all banks to put in place measures to mitigate against cyber risks with measures that conform to global best practice around cyber security. Top of mind measures include customer education and employee training for them to recognise scams via simulations and alerts.
FM: There are concerns about limited credit access for SMEs. What is being done?
SM: Through supporting financial inclusion and business incubation initiatives, startups and MSMEs are provided with capacity building opportunities which allow them to be bankable and help them prepare for access to finance from the banking sector. A major positive intervention has been the introduction of the Collateral Registry System at RBZ for moveable assets that can be used to secure loans in a central repository that all financiers can access. This has made access to credit easier for small businesses. Credit flows to SMEs are also being made easier through concessionary funding facilities supported by the RBZ and through the ECGC credit guarantee scheme to support bank loans to SMEs. We believe it is critical to support these businesses. The banking sector continues to work closely with RBZ in this regard.
FM: What concrete steps are being taken to fight internal corruption in banks?
SM: Banks have internal risk limits and policies that support good corporate governance principles. Banking supervision also monitors lending practices through regulatory thresholds which should dissuade unwanted behaviour. The RBZ through its Banking Supervision Division conducts periodic audits and on-site inspections to ensure that financial institutions operate in full compliance with regulatory standards and maintain sound governance practices. In the context of the foreign exchange market, now operating under the Willing Buyer, Willing Seller framework, the RBZ has strengthened oversight by requiring verifiable documentation, such as pro forma invoices, to confirm the legitimacy of import transactions. Several concrete steps have been taken to address these challenges.
