By Owen Mandovha
Zimbabweans’ tendency of shunning the banking system and holding on to large sums of cash has somehow made them easy targets for robbers.
This has seen economists calling for more to be done to encourage banking, saying there is need to restore banking sector confidence to lure more deposits in the wake of money heists which have laid bare Zimbabweans’ high propensity to hold on to huge sums of cash.
One of the factors cited by South Korea-based Zimbabwean economist, Mr Collen Jonasi, is transaction costs and bank charges which are discouraging banking.
“Transaction costs and charges are very high and that obviously dissuades any business to deposit cash in banks. Also, the interests earned by deposits are very low thereby reducing any incentive to use banks,” he said.
Another economist, Ms Happiness Zengeni says the issue of confidence in the banking sector remains a thorny issue which the central bank needs to work on.
An additional worrying trend is the culture of holding on to large sums of cash for speculative purposes.
Economist Mr Titus Mukove said, “We need the banking culture to return. So, this is a collective effort by government and the banks themselves as the current trend is rendering banks useless.”
However, the Reserve Bank of Zimbabwe is making huge strides in terms of sprucing up the image of the banking sector, which to date has witnessed a surge in total foreign bank balances to more than US$7 billion.