When I wrote the very first instalment of this column in mid-2010, John Mushayavanhu had just begun his tenure as Bankers Association of Zimbabwe (BAZ) president.
Column by Omen Muza
I remember in that article congratulating him for expressing the desire to work with “colleagues in the banking sector to demystify banking to various stakeholders”.
He further expressed concern that the unbanked population had reached an all time high and said he would work with “fellow bankers to make banking attractive and worthwhile to the banking public.”
It’s now almost three years down the line and the BAZ has a new president in office. The question to ask is whether the association has since delivered on its manifesto.
Many will disagree and if anything, will argue that the banking sector has become even more alienated from its various stakeholders due to a heady cocktail of issues such as bank closures, customer service deficiencies, a protracted recapitalisation process, not to mention bank charges and interest rates that have been perceived to be very high.
One such key stakeholder, clearly dissatisfied with the conduct of the banking sector in tackling consumer education and protection issues is — predictably — the Consumer Council of Zimbabwe (CCZ), which, despite itself doing precious little to protect consumers in any meaningful ways, still makes a valid point.
“It would seem that authorities that be (sic), appear more inclined on protecting banks from possible run ins, forgetting that they also have a moral responsibility to inform and educate consumers about the soundness of their banks from time to time so as to allow them to make informed choices about who to bank with, as well as enable them access to fair financial services. Sadly, this crucial information has not been readily accessible from the authorities concerned, which is a grave area for concern,” said the consumer rights watchdog in a statement issued upon the closure of Genesis Investment Bank and the placement of Interfin Bank under curatorship in June 2012.
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The CCZ noted that for two years, the World Consumer Rights Day had globally been celebrated under the theme, “Consumers for Financial Services” and they had been calling for increased transparency, better choice, fair services and financial literacy in the sector.
Accordingly, the Council wants government to expedite the passage into law of a Consumer Protection Act to harmonise all existing consumer protection legislation. In the meantime, it notes that despite these concerns, not much has been done to deal with the issue of consumer protection and financial literacy.
“Suffice to say, the CCZ has not received satisfactory responses from the financial services sector about what they are doing to protect the rights of consumers,” lamented the statement.
Against this backdrop, the Financial Sector Spotlight (FSS) recently requested BAZ President George Guvamatanga for an update on how they intend to deal with this elephant in the room which won’t go away until something is done.
Guvamatanga said the issue of consumer education and financial literacy was high on the agenda of the current BAZ presidency, adding that it was in fact the basis of the recommendation to the relevant industry regulators for the creation of the office of the Banking Ombudsman.
“At one stage plans were even at an advanced stage to invite Clive Pillay, the current Ombudsman for Banking Services in South Africa to address stakeholders in Zimbabwe on the functions of his office. However, we had to put that process on hold at the instance of key stakeholders,” said Guvamatanga.
He added that the BAZ also intended to update the code of conduct for the banking sector, a key document that outlines the sector’s self-regulatory framework on how to deal with the public in terms of its products and services.
According to the BAZ president, the banking body also intends to recruit an Advocacy Officer to push the consumer education agenda and to work on increasing public awareness of how banks work.
Additionally, in order to strengthen the BAZ Secretariat which is led by executive director Sij Biyam, an economist would also be recruited to focus on research and development issues for purposes of policy advocacy.
“When the pressing issues of interest rates and bank charges — and to some extent recapitalisation — came onto our radar, all these other initiatives had to be put on hold because sometimes we can’t multi-task,” said Guvamatanga.
Now that the dust has somewhat settled following the conclusion of the MoU with RBZ and the recent “recapitalisation reprieve”, it is hoped that the BAZ can put shoulders on the wheel and run with these initiatives to the finishing line. The BAZ, the Reserve Bank of Zimbabwe and the Ministry of Finance can be assured that the banking public is waiting with bated breath.
Feedback: [email protected]. Omen N Muza writes in his personal capacity.
