Business Reporter
MUTARE – The Deposit Protection Corporation of Zimbabwe (DPC) has issued a strong warning to the public about the risks associated with unregistered deposit-taking schemes, urging individuals to utilize formal banking channels to safeguard their cash and investments.
In a nationwide campaign aimed at promoting financial inclusion and the growth of the financial sector, DPC has highlighted the dangers posed by the proliferation of pyramid schemes and informal savings groups, commonly known as mikando/amaclub.
These schemes have led to significant financial losses for many participants when they collapse.
Mr. Hopewell Zinyau, the chief executive officer of DPC, emphasized the importance of protecting depositors’ funds.
“As the Deposit Protection Corporation of Zimbabwe, we are in the business of protecting depositors’ money through a fund we run,” he stated during a recent breakfast meeting with bankers and media in Mutare.
“Depositors’ funds are protected in the event of a bank failure. DPC is on standby to compensate depositors in a failed bank of up to a cover level of US$1,000.”
Zinyau further explained that for those banking with registered micro-finance institutions, the coverage is up to US$500 or its local currency equivalent.
“We encourage people to bank through the normal channels for the sole reason that their deposits are protected through the Deposit Protection Fund,” he added.
“Using unregistered micro-finance institutions, such as ‘mikando’ and other pyramid schemes, leaves depositors without any safety net if those schemes collapse.”
Mr. Godfrey Dzveda of the Tariro Foundation Zimbabwe, which supports persons with disabilities, echoed Zinyau’s sentiments, stating that financial matters should involve every citizen, regardless of their social standing.
“This is a welcome awareness on the advantages of having our deposits with registered financial institutions where there is guaranteed safety of our deposits and compensation whenever there is a bank failure,” Dzveda remarked.
He also highlighted the importance of social inclusion in financial matters, noting that vulnerable groups, including persons with disabilities, can contribute meaningfully to the country’s economic growth.
“We are glad that we have managed to share our submissions for consideration where we requested for capacity building for our members in terms of income-generating projects and financial awareness,” he said.
The DPC’s campaign aims to educate the public about the risks associated with informal savings schemes and to encourage the use of registered financial institutions to ensure the safety of their deposits.
As the financial landscape continues to evolve, the DPC remains committed to protecting depositors and promoting a stable banking environment in Zimbabwe.
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