Innocent Sibonginkosi Ncube | Zim GBC News
HARARE – The Ministry of Finance has clarified that recent delays in remitting civil service salary deductions to banks and microfinance institutions were a deliberate intervention, not a system failure, aimed at halting predatory lending practices.
In a statement released on December 24, Finance Minister Professor Mthuli Ncube revealed that Treasury withheld payments to conduct a compliance audit after uncovering evidence of widespread legal violations by lenders.
“The temporary withholding of remittances was a targeted measure intended to allow for a full-scale compliance audit,” the statement read, noting that some institutions charged exorbitant interest rates and deducted up to 100% of borrowers’ net salaries, leaving civil servants with no disposable income.
“In some extreme cases, civil servants were left with virtually no disposable income,” the Ministry stated, confirming the actions violated the Moneylending and Rates of Interest Act, the Microfinance Act, and the common law in duplum rule, which caps interest at the principal amount.
Minister Ncube defended the intervention, stating,
“This situation compelled Treasury to intervene promptly to protect the well-being of public sector employees and ensure compliance with the law.”
He emphasized that the payroll deduction system plays a “central role” in providing access to essential services and that the audit was aimed at preserving its “integrity, credibility and sustainability.”
The Ministry reported that the issue has now been resolved with most lenders, and remittances have resumed.
“As of this date, only two institutions remain under active review,” the statement noted.
Treasury pledged continued collaboration with the Reserve Bank of Zimbabwe (RBZ) and the Insurance and Pensions Commission (IPEC) to strengthen oversight and ensure lawful lending.
“Ethical and lawful lending practices are essential to safeguarding the financial security of Zimbabwe’s workforce,” the Ministry concluded.
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