“WE call the local bankers tsotsis — surely these bankers are representative of the wider spectrum of black entrepreneurs in the country. Are we not running the risk of labeling these black banking entrepreneurs tsotsis at the risk of labelling all other black entrepreneurs tsotsis? Do bankers come from a different breed of indigenous entrepreneurs?”
Report by Own Correspondent
This was the introduction to a piece titled “Where are we getting it wrong?”, featured in one of the weekend papers. I found it so interesting and thought-provoking that I could not resist saying something in return, mainly for two reasons.
Firstly, I agree with the author of the article (even though he/she chose the veil of anonymity) that bankers are a microcosm of the society in which they exist. For instance, when the late Roger Boka (God bless his soul) was indiscriminately doling out loans at United Merchant Bank, who were the customers? Secondly, I have always felt that though they have their faults, sometimes bankers tend to become easy, convenient scapegoats for the sins of others.
At this point, let me hasten to say that without “Where are we getting it wrong?” I would not have deigned to write an unsolicited piece in defence of this breed of people who have become the usual — if not convenient suspects — for fear of being misunderstood. However, that is a matter for another day, my task today is to articulate my views on why I think bankers get the flak they get and where, in my view, we get it wrong.
First and most important, bankers, unlike other black entrepreneurs, have a fiduciary duty which comes with being custodians of depositors’ funds. This is why unlike other unlisted companies, banks are required to publish their results twice a year. The banking profession is, by its very nature, in the spotlight perhaps more than any other. People love to hate bankers, the same way Margaret Thatcher was loathed by the British sections of the public for taking them where they had to go instead of where they wanted to go.
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Further, culpability for the global financial crisis, which admittedly caused more suffering for the man on the street than the man on Wall Street, is attributed directly to the greed of bankers. Therefore, by association, any banker anywhere can/will be tarred by the same brush, even though greed is pervasive amongst other entrepreneurs outside banking.
This is why the Occupy-WallStreet mutated and spread to several other countries on the globe outside America and this is why Main Street will always run parallel to Wall Street.
Traditionally, the banking fraternity has always claimed the high moral ground for itself when it comes to honesty and integrity in financial matters. There is, however, a small price to be paid for this. Transgressions that would otherwise be tolerated from all other black entrepreneurs will not be tolerated from black banking entrepreneurs.
In relative terms, more non-banking companies than banking institutions are failing in Zimbabwe, the only difference is that banks tend to deal with multiple parties, so when a bank fails, there are systemic implications. Of course, the bank failures between 2004 and 2012 have not made it any easier for banks.
I know banking entrepreneurs who have really fouled up, but I also know some non-banking black entrepreneurial types who have messed up monumentally and who owe their continued existence only to several sinking ships on which they continually shift deck chairs. If the bankers were to suddenly pull the plug of additional credit, such companies would immediately crumble like the deck of cards they already are. Bankers, by contrast, no longer have the luxury of regulatory arbitrage as they used to in earlier days before the RBZ tightened the regulatory screws and closed the loopholes.
When it comes to pricing of products and services, every day we learn of price increases in other sectors of the economy such as the retail sector for instance, without any intervention from regulators. However, as soon as this became an issue for banks, they were cornered into signing a Memorandum of Understanding (MOU) with the RBZ, effectively capping bank charges and interest rates. Other sectors get away with mere finger wagging or tongue-lashing from the Minister of Finance.
I think where we get it wrong is that we blame the bankers when we should be blaming those whose job is to create conditions in which bankers can thrive instead of strive — the black political entrepreneurial elite. Where we get it wrong is when we blame the bankers for failure to raise offshore lines of credit and for failure to recapitalise banks. By so doing, we let the politicians go scot free, yet, through their numerous omissions and commissions; they are the chief architects of the country’s unsavory sovereign risk profile which makes it almost impossible for bankers to raise external capital.
What we should be asking the black entrepreneurs in charge of running our country is where they expect the black entrepreneurs running our banks to get the kind of money they themselves (politicians) say they can’t find.