THE Deposit Protection Corporation (DPC) is targeting a US$106 million Deposit Protection Fund, almost four times its current level, to strengthen Zimbabwe’s financial safety net and improve its ability to compensate depositors in the event of a bank failure.
The target, equivalent to 2% of total banking sector deposits, comes as the corporation accelerates efforts to grow the fund through investment income.
The fund’s value rose 89% to US$28,8 million in 2025, driven by a US$13,4 million surplus and strong investment returns.
Zimbabwe’s banking sector had 6,88 million commercial bank deposit accounts at the end of 2025, comprising 4,23 million ZiG-denominated accounts and 2,65 million foreign-currency accounts.
DPC data shows that 99,4% of ZiG accounts and 96,3% of foreign-currency accounts were fully covered under the existing deposit insurance framework.
However, coverage by value remained significantly lower.
Only 13,2% of total ZiG deposit values and 6,4% of the US$3,4 billion held in foreign-currency accounts fell within insured limits, reflecting the concentration of deposits among a relatively small number of high-value account holders.
The gap between account coverage and deposit value coverage has become a key driver of the DPC’s push to expand both the fund and depositor protection levels.
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“The corporation is targeting 2% of the total deposits as its fund size. Currently, the target fund size is US$106 million,” DPC chief executive officer Hopewell Zinyau told businessdigest.
He said the current fund could only adequately deal with the failure of a medium-sized bank.
“It is also important to note that in the event that the fund size is not adequate, the Corporation has powers to levy supplementary charges and borrow from the market, the central bank and the central government,” Zinyau said.
Reflecting its growing financial strength, the DPC recently increased deposit insurance cover for commercial bank customers threefold to US$3 000 and quadrupled protection for deposit-taking microfinance institution clients to US$2 000.
“Although the value of the deposits covered is low, following a review of the cover limits to US$3 000 for banks and US$2 000 for DTMFIs, the proportion of the value of deposits is expected to be within the international acceptable range of between 10% and 20%,” Zinyau said.
He said factors considered in setting cover limits included fund size, public policy objectives, financial stability implications, the condition of insured institutions and the credibility of coverage levels.
“The protection comes from two fronts. First, the compensation comes from the DPC Fund. The second protection comes from liquidation of the failed bank’s estate,” Zinyau said.
“If the value of deposits in a failed bank is above the coverage limits, the Corporation will compensate up to the coverage limit. The other compensation will come in the form of a dividend from liquidation proceedings and will be paid on a pro-rata basis.”
DPC chairman Canaan Dube said the corporation was implementing a new strategic plan focused on strengthening operational efficiency and growing the fund.
“Looking ahead, DPC has set clear priorities which include full implementation of the single customer view system across all contributory institutions and ERP system to enhance automation of processes, robust investment drive to boost Fund size and expanding ESG reporting in line with vision 2030,” Dube said.
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