The festive season is here! It is a season of good cheer, of giving and sharing.
In this season, even serious financial types must step back from their number-crunching and agenda-setting routines; as much to recharge their batteries in preparation for a brand new year as to simply celebrate or at least observe the birth of our saviour Jesus Christ.
Unlike in the movie Wall Street: Money Never Sleeps, this is a time for money to sleep a little, if not for a few hours, then for a few days.
Accordingly, this week, I desist from tackling weighty financial matters and immerse myself in the Christmas spirit, letting the chips fall where they may but basically staying within the realm of the financial sector.
In a season characterised by giving and sharing, I suppose the question for the financial sector is not “to give or not to give?” but rather “what and when to give?”
Against the background of an impression that banks are unwilling to pay reasonable interest on deposits but are more than ready to charge high interest rates on loans, the banking public will be justified to feel that for the better part of the year, they have been doing most, if not all, of the giving, so it is time the banking sector considers giving something, anything, in return. The big question must then be: “What will the banking sector give this festive season?”
The one gift, it would appear, that the banking sector is intent on giving the banking public this Christmas is mobile money. Recently, a slew of card, and mobile-based payment platforms have been brought to the market by different banks. Kingdom Bank Limited has been aggressively pushing its CellCard, touted as “Zimbabwe’s first mobile money transfer service” and “banking at your fingertips”.
Tetrad is on the market with the e-mali card, said to be “a powerful, convenient and cost-effective account”. FBC Bank Limited is in partnership with Net One on the OneWallet product, described as “convenient and secure”.
Kingdom Bank has deployed an army of agents in brightly coloured bibs and matching floppy hats, who are prowling the streets and besieging informal markets exhorting informal traders, vendors and the general public to sign up for the CellCard; while Tetrad has in-store representatives targeting shoppers.
NetOne, FBC Bank Limited’s technology partner for the OneWallet product is on a drive to swap subscribers’ current SIM cards for the 128 kilobyte SIM card which has higher security features and larger memory capacity, in preparation for rolling out of the money transfer service.
It seems that the battle of the banks to smoke out the money that is reportedly hibernating in the nooks and crannies of the informal markets is off to a blistering start, what with CABS also announcing the launch of a mobile banking service to cater specifically for rural communities!
Lower bank charges appear to be, amongst others, a key benefit being sold by the promoters of mobile money products while convenience is almost a watchword as far as product features are concerned, but can the lure of convenience and the promise of cost-savings on bank charges be enough to make a distrustful banking public forgive banks’ unwillingness (or is it inability) to compensate them adequately for their hard-earned deposits?
As the December 31, 2010 deadline for banks to meet the Reserve Bank of Zimbabwe’s regulatory capital requirements draws near, the banking public waits with bated breath for confirmation of the compliance status of the sector.
Will the banking sector’s ultimate Christmas present be a fully compliant array of banking institutions, if not a largely compliant one, at the very least?
Injection of new capital by bank shareholders will have the salutary effect of increasing public confidence in the sector as banks will be better placed to absorb external shocks and have more capital at their disposal for purposes of underwriting bigger volumes of business.
This Christmas will, for many Zimbabweans, be the best in a long time; firstly because disposable incomes have improved considerably since this time last year and secondly, because a wider variety of consumer goods is now more readily available in shops, though in some cases priced out of the reach of many.
Resultantly, most people with a source of income are expecting to have a largely hassle-free and enjoyable holiday period.
However, a precondition for that to happen is that access to money held in banks must not only be guaranteed but it must also be available timeously if account holders are to find adequate time for proper Christmas shopping.
Will banks deliver enough cash to the most number of people with the least hassle? Are people going to find themselves in Kuwait once again, where they queue and wait in long lines that snake into banking halls wherein they can either yield cash or disintegrate into disappointment?
Will the banking sector brush aside recent threats of strike action by its workers and generously share the gift of convenience? Or will they spread the despondency of cash shortages, causing a multitude of expectant customers to plumb the depths of financial despair, yet again?
Plastic money has been touted as the solution to any potential cash shortages but there are concerns that in an economy which still requires large amounts of cash for daily transactional purposes, most retailers still do not offer “cash back” facilities when a customer is transacting through an in-store POS terminal.
The issue of high bank charges has been flogged publicly many a time and recently, a disgruntled customer wrote to one of the local publications requesting “the RBZ, the Ministry of Finance, The Registrar of Banks and the responsible authorities” to intervene and reign in banks in respect of service charges.
“The truth of the matter is that banks are fleecing us and it’s daylight robbery,” charged the irate customer. Will banks, having heard the distant, anguished cries of the long-suffering banking public and finally felt pity for them, waive bank charges or at least reduce them just for this Christmas?
Why not scrap them altogether for just one day or at least for selected transaction types only, if not to thank the customer, the goose that lays the golden egg, then to simply perform a gesture of goodwill inspired by a season of goodwill?
As for YOU, dear reader, what will you give in order to appease the prevailing spirit of Christmas?
Remember that even if you don’t give in the physical sense of the word, what you do can in itself be an act of giving, if not to others, then to yourself. As for me, I am quite clear about what I must do.
Apart from heading for the countryside for a few days to detoxify my financial psyche clogged by a hectic year punctuated by much unrewarded effort and unmet expectations, I will create some time to watch a movie called Wall Street: Money Never Sleeps, which revolves around the 2008 financial crisis.
I am sure I will be adequately entertained and educated in equal measure as I prepare for a new year that looks set to present even more formidable challenges than those of the current one.
I wish you all a Merry Christmas and a prosperous New Year! We will touch base again in 2010 as there is still enough time for one more article next week to cap the year before we welcome 2011.
Omen N Muza is a banker and managing director of TFC Capital (Zimbabwe) (Pvt) Ltd. He writes in his personal capacity. For feedback and your views on the issues raised in this article, please contact him on: email@example.com