THE Bankers Association of Zimbabwe (BAZ) said recently that financial institutions must take advantage of exchange rate stability and single-digit inflation to expand lending to productive sectors, signalling renewed confidence in an economy long battered by volatility.
Banks have gone through years of cautious lending driven by runaway inflation, currency instability and persistent liquidity shortages.
Sector players have, in recent weeks, told businessdigest that several major banks have increased loan approvals and shortened turnaround times, although most institutions are still issuing loans with maturities ending in 2030.
This is despite policy changes introduced by the Reserve Bank of Zimbabwe (RBZ) indicating the current monetary regime will be in force beyond that year.
“The sector views the current environment as a significant opportunity. Zimbabwe is experiencing a period of stability and single-digit inflation not seen in decades,” BAZ chief executive officer Fanwell Mutogo told businessdigest.
“This stability provides a predictable foundation for long-term strategic planning and allows banks to refocus on their core mandate of lending to support economic growth.”
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Zimbabwe’s banking sector has spent years operating under extreme economic turbulence marked by rapid inflation, exchange rate swings and weak confidence in the local currency, the Zimbabwe Gold (ZiG). These conditions have made long-term lending nearly impossible.
Authorities have maintained a tight monetary policy stance to restore confidence and stabilise prices. Mutogo said the measures were beginning to pay off.
“The RBZ’s tight liquidity stance was a necessary intervention that has yielded tangible results in stabilising the economy,” he said.
“Banks continue to facilitate lending within available parameters. Furthermore, the introduction of the Targeted Finance Facility by the central bank has effectively augmented the sector’s capacity to meet client demands and support strategic economic activities.”
Despite the improving environment, banks remain cautious, with most loans still structured around the 2030 horizon because legislation continues to recognise that year as the deadline for the adoption of a mono-currency regime.
This is despite the RBZ decoupling the mono-currency policy from the 2030 deadline in its 2026 Monetary Policy Statement (MPS).
Mutogo said most lending was now being directed towards key productive sectors.
“According to the 2026 Monetary Policy Statement, the majority of bank loans are channelled towards productive sectors, including agriculture, manufacturing and mining, ensuring capital reaches the areas most vital for national growth,” he said.
Banks have also accelerated investment in digital banking systems, cyber security infrastructure and fraud detection technologies as more customers migrate to online platforms.
On bank charges, Mutogo said recent reforms introduced in consultation with the RBZ were aimed at supporting financial inclusion and easing the cost of doing business.
The 2026 MPS capped cash withdrawal charges at 2% and point-of-sale charges at 1,5%, while scrapping account balance inquiry fees.
Mutogo said the measures were already being implemented across the sector.
He added that confidence in ZiG would strengthen if economic stability is sustained.
“As stability persists, businesses are naturally gaining confidence in the local currency,” Mutogo said.
“This is further bolstered by government policy requiring certain statutory obligations to be settled in ZiG, which creates demand and reinforces the currency’s utility within the formal business ecosystem.”
He also dismissed concerns over the health of the banking sector.
“Claims of fragility in the banking sector are inaccurate. Official statistics from the Reserve Bank of Zimbabwe consistently demonstrate that the banking sector remains safe, sound and well-capitalised,” Mutogo said.
“Banks continue to rebuild long-term trust through transparency, improved service delivery and the maintenance of high prudential standards.”
Across southern Africa, banks are also beginning to reposition for a new phase of lending growth as inflationary pressures ease and central banks gradually pivot from aggressive tightening cycles adopted after the Covid-19 pandemic and global commodity shocks.
In South Africa, commercial banks have cautiously expanded corporate and mortgage lending as inflation trends lower and expectations build around future interest rate cuts. Zambia’s banking sector has also recorded stronger appetite for private sector lending following relative exchange rate stability and improved mining sector prospects.
Botswana and Namibia are similarly seeing banks intensify digital banking investments while targeting agriculture, mining and infrastructure financing to support growth. Regional lenders, however, remain highly sensitive to sovereign risk, currency volatility and debt pressures that continue to weigh on several African economies.
Analysts say Zimbabwe’s banking sector now faces a defining test: whether the current stability phase can last long enough to restore confidence in long-term lending and broader financial intermediation after years of economic shocks.