Sithembinkosi L Jiyane
Business Reporter
Bulawayo – Zimbabwe’s banking sector, once seen as a gateway to financial liberation, is increasingly becoming unaffordable for ordinary citizens due to exorbitant fees and charges, forcing many to abandon formal banking altogether.
Economists and account holders say punitive transaction costs, monthly maintenance fees, and withdrawal limits are discouraging financial inclusion, with many opting to keep cash at home or use informal money transfer systems.
“Money Under the Pillow” Mentality
Economist Reginald Shoko told Zim GBC News that banks have shifted from being interest-bearing institutions to fee-charging entities, pushing the unbanked population even higher.
“If someone deposits $200 today, by month-end, that money could shrink to $195 due to charges. Traditionally, banks paid interest, but now they profit from fees. This is why people prefer keeping cash at home rather than in banks,” Shoko said.
Pensioner Nicholas Ngwenya, an local bamk account holder, said he withdraws his entire $150 monthly pension immediately to avoid deductions.
“If I leave the money, the bank will finish it with charges. Every transaction has a 10% fee—how can anyone save under these conditions?” he lamented.
Informal Sector Thrives as Banks Lose
With Zimbabwe facing chronic cash shortages and a volatile local currency, many salaried workers withdraw their money as soon as it hits their accounts, flooding the black market in search of stable foreign currency.
Joseph Nyoni, a small business owner, said he has not used his bank card in three years.
“High fees mean I must pass costs to customers, hurting my business. Banks should reduce charges so we can safely deposit money, access loans, and earn interest,” he argued.
Nyoni added that affordable banking would improve liquidity, enabling financial institutions to inject capital into the economy and boost GDP growth.
Bulawayo’s Sky-High Interest Rates
Current bank rates in Bulawayo reflect the harsh financial landscape:
- Deposit Interest Rate 8.87%
- Interest Rate 35.00%
- Lending Rate 46.11%
Call for Government Intervention
Financial experts urge authorities to regulate fees and promote financial literacy.
“Banks and government must work together to make services affordable. Lower fees, easier account openings, and financial education are critical,” Shoko emphasized.
As Zimbabweans increasingly resort to mobile money and informal savings, the banking sector risks losing its relevance unless it addresses its costly and exclusionary practices.
Zim GBC News©