THE current cash crisis will militate against deposits mobilisation with total banking sector deposits projected to grow by 0,96% this year to $5,25 billion, a leading research firm has warned. Last year total banking sector deposits were $5,2 billion.
BY NDAMU SANDU
In its report, Zimbabwe Banking Sector Analysis FY 2015, MMC Capital said the growth of deposits would be constrained by the cash shortages that would militate “against greater public confidence in the banking system”.
The warning by MMC comes as Zimbabwe was grappling with a cash crisis that has seen depositors failing to access their money from banks, with a number of banking institutions putting caps of $200 on withdrawals.
MMC said due to the cash crisis monetary authorities should encourage the use of plastic money.
“Given the growing informal sector, at the expense of the formal sector, banks should continue to develop products that help in tapping into the unbanked segment of the society if earnings are to be sustained,” it said.
It said waning disposable income would further erode the propensity to save and thus impacting negatively on deposit growth.
The MMC warned that the liquidity constraints were likely to continue to be a challenge in Zimbabwe and welcomed the central bank’s efforts to plug leakages.
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In his January monetary policy statement, central bank governor John Mangudya announced a raft of measures to plug leakages, after it emerged that $1,8 billion was spirited out of the country last year by individuals and companies, worsening the liquidity situation.
The measures to plug the leakages include getting rid of the concept of free funds, reporting of suspicious transactions and use of plastic money. A customer who wants to withdraw above $10 000 will now be required to give the bank reasonable notice of at least a day.
“Unless leakages are plugged, the economy will continue to suffer from liquidity challenges as the government is, at present, unable to ‘pump’ more liquidity into the economy because the central bank cannot print money,” MMC said.
