Financial sector: from ‘burning’ to interest cash


John Mushayavanhu, the Bankers Association of Zimbabwe (BAZ)’s new president, recently expressed the desire “to work with my colleagues in the banking sector to demystify banking to various stakeholders”. As a trained banker privileged with access to influential public media, this resonated with me and I felt challenged to play my small part.
Welcome to the first installment of Banking Bulletin/Financial Sector Spotlight, a weekly column meant to simplify the financial supply chain in order to make it less intimidating to users of banking services.
In the olden days, the gravitas or aura of banking depended largely on the aloof; if not arrogant posture which bankers projected as they went about their business of meeting the public’s banking needs.
Bankers did not go to people, people came to the bank. However, despite this rather one—sided relationship, a banker’s word was his or her bond. All that has since changed and in the wake of the financial gymnastics seen over the years which culminated in the “burning” phenomenon about two years ago, the mere mention of a banker can evoke any number of images ranging from “wheeler dealer spinning the public’s hard earned money for personal gain” to “consummate professional providing the much needed financial advice and appropriate financing packages.”
In this new era of intense competition and illiquid market conditions (27 banking institutions chasing $1,4 billion can generate enough heat to warm the onset of this chilly winter of our discontent), financial sector professionals have much work to do to woo the public back into banking halls. John expressed concern that “the unbanked population is now at an all time high” and said he “would like to work with my fellow bankers to make banking attractive and worthwhile to the banking public.” Well, his work and that of his colleagues at BAZ is cut out for them.
Encouragingly, competition — and the desire to reclaim their former respect and honour — has made bankers realise, rather ironically, that the only way this can be achieved is by climbing down from any pedestals — real or imagined — and going right where the masses are. We have already seen this happening in the form of conversion of merchant banking licenses to commercial banking licenses, in the proliferation of electronic banking products namely Internet banking, mobile banking and Point of Sale (POS) terminals in retail outlets — all designed to offer convenience and security to the banking public. Now bankers must go to the people, not the other way round. The balance of power has shifted—the mountain must now come to Mohammed.
While John and his colleagues in the banking sector are engaged in the important work of coaxing money from under bedroom pillows and back into banks’ vaults, those of us who can contribute their two cents worth should by all means do so.
For my part, I will use this column to discuss weighty banking matters such as the cost of credit and banking services; whether our economy is overbanked or not; how the financial supply chain works; the basics of exporting and importing; the nature of and access to trade finance instruments and many other issues that may be topical from time to time. Additionally, for the next six weeks or so, I will share with you some basic principles of sound banking practice that have remained valid for over a century.

l Omen Muza is a banker