HARARE: The Reserve Bank of Zimbabwe says confidence is slowly returning to the country’s rugged banking sector, as the value of deposits increased by just over a quarter to $4.24 billion in August 2015 compared to last year. In the corresponding period last year, $3.37 billion deposits were recorded, latest figures from the central bank show.
Early this year, a survey revealed that about 70 % of the country’s population preferred keeping its money under “pillows and mattresses” despite the increase in financial inclusion mainly driven by mobile phone money banking. Respondents to the survey said, in an economy dominated by the informal sector, collapse of some banks and negative interest rates, they were concerned with the security and stability of banks.
In its monthly economic review released this week, RBZ said deposits in August were mainly dominated by services, which contributed $1.042 billion, while financial organisations chipped in with $784 million and individuals deposited $647 million.
Card based transactions increased to $506.6 million from $487 million in July and the total value of mobile and internet based transactions rose to $524.80 million in August, from $519.7 million in July. However, a decline was recorded in cheque transactions, down from $12.6 million to $11.4 million in August.
The central bank said on an annual basis, growth in credit to the private sector, which makes up the largest proportion of banking sector credit, slowed down to 1.4 % in August from 1.9 % in July 5. On a month-on-month basis, credit to the private sector also declined to $3.78 billion in August from $3.77 billion.
The central bank noted that on a month-on-month basis, credit to the private sector decelerated from $3.77 billion in July, to $3.78 billion in August 2015. In terms of composition, loans and advances constituted 83.3% of the total credit to the private sector, mortgages advanced by building societies, 12.8%, other investments, 2.4%, bankers’ acceptances, 0.3% and bills discounted, 1.3%, in August.
