Chinamasa attacks local banks


Finance minister Patrick Chinamasa has attacked the banking sector, blaming some financial institutions of attempting to drive the economy on its knees since the adoption of multiple currencies five years back.

Tarisai Mandizha

Addressing delegates attending an economic outlook symposium organised by Mandel Training Centre and the University of Pretoria-based Gordon Institute of Business Science, Chinamasa said financial institutions should extend more credit towards the thriving informal sector as Zimbabwe’s economy transforms.

Chinamasa accused some banks of imposing sanctions on the economy by limiting lines of credit.

“We cannot have a situation where the majority of our population has little access to the economy and no access to capital,” Chinamasa said.

“They used to organise lines of credit of up to $800 million, but now it is down to $40 million a year which is suggesting they are strategising an exit out of our economy . . . I get this feeling that these banks are imposing sanctions onto their own country.

“Our economy is now an informal economy, you can’t deny that there are more economically active people in the informal sector than the formal sector. There are less workers now through closures of those factories and mines. They (people) are keeping those funds under the pillows.”

According to a Finscope study, 40% of the Zimbabwean population was unbanked.

Statistics show that Zimbabwe’s financial industry has more than $4 billion which remains unbanked as financial institutions fail to restore depositor confidence.

Turning to the mining sector, Chinamasa said the capital-intensive industry, now the key driver of the economy, should overhaul their business models to ensure that they significantly contribute to the economy. Mining now accounts for over 60% of total exports.

“We need recapitalisation of our mines and we need better management of our mines. We have been overtaken by Tanzania in terms of gold production,” the Finance minister said.

“I know people say don’t find excuses, but Zimbabwe is on sanctions, but the issue is we should overcome them, go around them. If there is patriotism we can overcome, other nations have overcome sanctions.”

Total banking sector deposits, according to the Reserve Bank of Zimbabwe, was up 4,52% to 4,62 billion as at October 25 2013. The loans to deposit ratio decreased to 81,67 from 83,23% during the period under review.


  1. It’s not the banks honorable minister but your policies and inconsistent policy statements that scare away investors. There is no confidence in our banking sector,your threats to nationalist banks did not go down well. Capital flight is the net result. Blaming banks for for your failures is a bit rich.

    • Stanbic is one of the banks which is sabotaging the economy last year before elections thy suspended loans and promised its clients to issue after elections when their horse was humuliated in the election thy complitly scraped loans.

      • @byo
        Zanu Pf has been looking at people like you. those that have bought into their garbage of blaming everything on everyone except themselves.

        right now Iran, of all the nations in the world is on its knees begging to normalise relations with the west. why couldn’t they just deal with the so called brics and forget about the west.

        Svinurai mukoma, nyika yoparara muchizvikudza nezvinhu zvisina basa. I agree with indigenization but this thing will never benefit zimbabweans for as long as our relations with the west are sour.

        Which bank has been issuing out loans recklessly and has survived. look at trust bank, look at interfin. Muno muzimbabwe hamuna bank rine mari yaro yariri kupa vanhu especially local banks, its money borrowed from international banks

        • @mwaditawani, were does Zanu pf and indiginasation fit in my comments?Barclays,ZB is giving loans and it has been giving loans and its still kicking.As a matter of fact try to research on bank annual reports ,they r making $300 million profits which means thy have money thy can give loans.I know u hate Chinamasa or Zanu pf like me but if thy r saying the trueth chingo bvuma mwana wamai

          • Iwe bharanzi, which bank is making $300m profits? Are you on crack? Not even Econet or Delta are making those kinds of profits..

          • banks give loans basing on their cash holdings muface wangu. kana Barclays iine mari hazvirevi kuti automatically Trust neStanbic vanayo. kana wanyimwa loan it doesn’t constitute any economic sabotage. It’s high time we shift from blame shifting if we are to progress baba.

    • @Ndaba, u r correct if u say the problem is Gvt policy but how come some banks like Barclays are giving loans 14 times you salary and by so doing people r now able to take loans and do personal projects eg bulding houses and buying cars wich is part of creating employment int the construction and motor industry.

      • vanganiko vanhu varikupihwa mari, usati kana unabhururu who recommends u, then t means all account holders re gting the sme treatment

    • It is because of sanctions, the zanu dictionary keyword. Kana ukarasa mari zvonzi “masanctions”. Mazvitadzaka vaChinamasa? Maifunga kuenda kunotyisidzira innocent pple nemasammons, kkkkkk.

  2. When the government used to grab forex from private accounts and devaluation of the zim$ they did’nt realize this is what they were creating. Now no one is sure on the sincerity of the government no one wants to bank. How can you ask the banks to give out loans to people who don’t even bank. Unless its guaranteed by the government like the youth fund which I understand not even a single cent has been payed back. There is no way the bank can be able to carry them. May you enjoy destroying the economy first it was agriculture now we import everything the manufacturing industry is now gone now you getting into banking giving the same excuses every time. Be objective and come up with good policies. otherwise we are doomed

  3. This chap doesn’t seem to understant economics, there is no production papa so mabanks haana mari its very sad to think kuti he is the man tasked to look after our finance ministry

  4. ATTACK ,ATTACK ,ATTACK AND ATTACK, that’s all he knows. Economic principles = ZERO. Does he even know what liquidity crunch means? NO. Banks are also struggling cde China. We are doomed with this shallow minded lawyer (liar) in the Finance ministry. Pity Zim.

  5. Personaly l dnt like Chinamasa, but on ths one he is correct banks should give back to comunity by loans banks which r doing the good jobs by giving loans are Barclays,Zb,NMB,Ecobank,banks which are sabotaging and not giving loans Stanbic Bank,Standard Charterd,Sterward.

    • For banks to give money, there has be money in the banks. If depositors are not leaving funds in their accounts and the investor is not confident to extend lines of credit to the banks, where do you expect banks to get the money to issue loans?

      • @question ths banks r making profits every year eg Stanbic last year made almost$300 million profit similar to Standard Chartered and you keep saying and believing tht thy dnt have money

        • Businesses have different models for making their money. Real businesses do not do basa rese rese. Stanbic have their own models of making their money. Maybe their model is only to make profit from deposit charges. Remember kuti even people who are approved to open accounts with Stanbic are not the same as those that POSB looks for. In the same vein they have different models of who and why to lend money (risk management and profitability). If you look at their profit/loan or profit per account holder, it could be far biggerthan for Stanchart or vice versa. The models are different so they lend money differently. Maybe they only lend to 1 organisation.

        • Iwe no company in Zimbabwe is making anywhere near $300m profit except maybe Econet. Kwana.. Analysts like you are what is costing the beautiful city of Bulawayo, have u even read the Stanbic company report?

          • @analst of bulawayo is 100% correct problem with @sdf he is mentaly imperialised and he is commenting on his part position nt whts on the ground

  6. This is a sad remark from you honourable. One would think that you would address the issue of companies closing instead of pple getting loans. The informal sector’s biggest risk is lack of collateral security. If you were a bank honourable would you lend money to someone with no collateral? I think we are majoring in minor wars and at your level honourable you must start to look at the movers and shakers that will turn this economy around, policies that favour investment and how to re energise the manufacturing sector so that we dont have this huge balance of trade defecit that drains the little inflows that come. Lets apply the 80/20 principle… your solution does not lie in the informal sector… sorry to say. Lets try again.

  7. Put simply, the money the banks disburse is people’s money or borrowed money. Of the money earned locally, most of it does not see the bank door, it remains as cash. So banks have to borrow off-shore for lending to business. It is this leg which is now difficult hence the minister sees that lines have gone down. Most people are not interested in open lines but want specific lines such as for housing. In the past we used to get open lines which we could loan at will. But due to the state of the economy we get more intrusive lines hence we can’t give to informal sector.

    Government should start by helping us to get the SMEs to bank first. They have no accounts but want loans? If they bank we can have local deposits which have little strings attached to lend to SMEs. Bottom line hatina mari and sometimes it comes expensive.

  8. This issue, honorable minister, is zero confidence in your leadership. This habit of reaping where one did not sow, of borrowing and not paying back, this culture of stealing, that is stifling development. Why should banks give loans when there is talk of stopping banks from acquiring the properties of loan defaulters? ZANU PF will never usher prosperity to Zimbabwe unless it restores the rule of law and protects property rights. Sooner or later this will have to end

  9. Banks rely on deposits to be viable but its a surprise that the banks which are said to be sabotaging the economy are being made viable by the same government which is banking with them.You will be surprised which bank the Ministry of Ndiginisation and DisEmpowerment uses.

  10. Chinamasa you say something really sensible when you refer to the Mkandiwas of this world in another story and I had hope for you… That has been dashed with your hopelessly out of touch and nonsensical hogwash about the banks sabotaging the economy when all sane and sensible people know that you, your boss and the entire ZPF party are the bane of this country’s progress and have destroyed a once vibrant economy that was the envy of Africa!! Criminal and insane!!

  11. It is fair to be honest. Why blame banks? Do they have the sustainable deposits?The answer is no. People deposit today and withdraw tomorrow! If the minister is honest, why did he not put a model that ensures that this ‘vibrant’ informal sector starts CONTRIBUTING TAXES to the fiscus? For me it means the minister is not sincere about the informal sector, it is rhetoric. I do not believe in the $4 billion in the informal sector, that is too much of an exaggeration parroted for self-serving interests. There is a very fine line between formal and informal. Take an example of someone into poultry. The chicks and stockfeed are bought from formal companies, chances are they borrowed from banks for working capital, and therefore need to repay. What the producer retains ‘under the pillow’ is the profit. Hang on, they have kids in school, and need to buy groceries for their upkeep from mostly the OKs, TMs, Spars and Foodworlds etc, themselves formal institutions with banking relationships! I deliberately left clothing, as the informal trader may go kwaKotamai, however school uniforms may still need to be bought from the EnBees, Adams etc.

    My point is the liquidity crunch is biting because there is no money in the economy as a whole. Informal and formal sectors together get their stock mostly from outside the country, further depleting the meagre liquidity in the economy, as they bring goods and not cash into the economy. Again we had land reform but little productivity thereon, so that is sedated industry, tobacco being an exception but we do not eat tobacco, so informal traders buy mealie meal from the formal shops.

  12. As usual there are people who comment without analysing/understanding the issue. The question is banks used to get credit lines from outside sources for on lending to local business/individuals. It has gone from 800 mil to 40 mil? Why? That is his question.What has fundamentally changed in terms of policy from the time of inclusive gvt to now which could account for this? Or is it as suggested a case of sour grapes over election results?

  13. All over the world, banks give loans on the basis of cash availability and credit worthiness. The ZANU-PF government has worked hard to destroy the value of money and OUR credit worthiness. However, I would like see our banks being a little more adventurous in offering products and services that attract informal funds and deposits. The rest, we all know what the problem is. I thank you.

  14. The Honorable Minister is deceived by the elegance of Bank Buildings and thinks there is a bottomless stash of cash. I think Gono can be helpful in some small way to explain how money comes in and out of banks. The Honorable Minister must also come clean on who is sabotaging the economy. We have heard newspaper stories of sanctioned salaries of public corporations staff of $40 000.00, $190 000.00 and $250 000.00 per month which are still being investigated, without end. Surely the hand of sanctions and infiltration by ” the West and their allies” should be a thing of the past. I fail to understand why a grown up man like the honorable Minister continues to tell untruths with a smile on his face.

  15. The role of government is to create an enabling environment for business to thrive including banks. The interests rates offered in Zim can attract enough capital to flood Zimbabwe but the owners of capital are scared that they may wake up and find their wealth is gone. Those who lived in Zim before 2004 understand what that means. Our pensions and savings were wiped out through issues that are now in the courts pitting the architects of the scam.

    I however applaud the minister for the bold statement that “We must work around sanctions and not use that as an excuse for our own inability”. The nonsense that there is $4b in the informal sector must be dismissed with the contempt it deserves. Informal sector activities have never been part of the government accounting system and it simply provides subsistence services to its owners. The Finscope survey that people keep referring to is a fallacy. They claim that there are 2.8 million small businesses that employ 2.8million people and if you read through it you wonder whether it is a survey at all. They claim that there is $4billion dollars in the informal sector yakabva kupi.
    I am however surprised by the minister’s statement about management inadequacies because all the mines are run by black Zimbabweans except new Dawn which is run by a white Zimbabwean. Where did you get this sir?

  16. This is the lowest of low – government imploring banks to lend to the informal sector. We have now staggered from the Third World into the Fifth World standards or the pre-colonial, pre-industrialised era. How can a country rely on the informal sector? Informal sector means one and one thing only – unsanctioned sub-standard services and goods leading to spread of diseases and criminality. Goods bought and sold in the informal sector are below acceptable international standards therefore a health and safety risk. You don’t know what you re getting. There are no guarantees. I went to the Siyaso market in Magaba some time back and I saw a young guy mending tyre treads with a sharp Stanley knife and polishing the mended tyre with black polish to make it look new. I felt sorry for anyone buying this mended tyre. If you get one of these on your car you are going to have a fatal accident without a shadow of doubt. That is the informal sector for you!
    Chinamasa says the banks are trying to drive the economy to its knees when it is already on its knees.

  17. The banks are not sabotaging anything by any means. There is a cash shortage in the country and people with the money trust our banking system…to you honorable minister I say, with all our ministers and government officials with large off-shore bank accounts why don’t YOU as a government put faith back in the banking sector by taking your personal monies and putting them in the system and allowing the ordinary person to be able to withdraw his little pennies without being told that he can only withdraw $50 when he is needing his entire balance to pay for bills and fees and buy food and all so let our government do the honorable thing and put their money in the system which they will be able to take back when the system is fully functional….

  18. can the Minister give a loan to someone in the informal sector , without a registered address for business , no security , no fixed abode . and when they fail to pay back where does he look for him and what does he recover. He should first try out with his money and lend them , then ask banks to follow suit

  19. minister, u r getting it all wrong. u r blaming evry1, everything and not yourselves, which is a disaster on its own. we r not interested in yo politics but tangible deliverables on economy. it was Makandiwa now its banks, tomorrow its me, next week my neighbor after 5 years its not u but some forces. we knew it from day one that u r a failure bcoz u don’t even know how the economy stand, its problems and its cure. how I wish u know what is failure.

  20. Vele our Zimbabwe will neva b a country again wen evry1 blames evrybody. For chinamasa, a lazy man always blames his tools. 1. banks cant do credit creation wthout a deposit base, they cant use the capital for advances.2 banking is a service industry that needs to be anchored by production of goods, so no production, no service provision 3. Chinamasa wen presenting the budget slammed borrowers saying they borrow wtout e intention of paying back, to this end lenders, not only banks ,will b reluctant to lend. so Voodoo banking is e order of e day in Zimbabwe. govt has to do smthing to foster depositor confidence so as to abreast e deposit-loan-ratio of banks.

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