HomeNews$1,5bn loans advanced in 2010 – BAZ

$1,5bn loans advanced in 2010 – BAZ


Zimbabwe’s banking sector last year advanced over $1,5 billion in loans to all sectors of the economy up from a paltry $120 million in March 2009 as confidence in the sector continues to grow, an official has said.

In his presentation on the role of the financial sector in the success of the commodity exchange market in Zimbabwe on Friday, Ngonidzashe Murota, a CBZ economist and Bankers’ Association of Zimbabwe representative, said this had seen loan-to-deposit ratio increasing.

During the period under review deposits into the banking sector grew from $400 million in March 2009 to over $2,5 billion at the end of 2010.

“Loan-to-deposits ratio also grew from an average of 30% to around 70% by the end of 2010,” said Murota.
He said banks continued to be the lifeblood of the economy and would play a critical role in the successful operation of the exchange.

Statistics contained in the 2011 National Budget statement indicate the bulk of the loans were distributed to the agriculture, distribution, mining and manufacturing sectors.

The average tenure of loans has also improved from between 30-90 days in January 2010 to current levels of 180 days though this still does not meet long-term borrowing requirements for capital expenditure.

Finance minister Tendai Biti is on record as saying due to the short-term nature of deposits, coupled with lack of financial instruments on the money market there is need to come up with measures to get banks to begin promoting longer-term deposits, including savings deposit products.

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