Business Reporter
Harare — Zimbabwe has formally liquidated four banks that collapsed during the country’s financial crisis between 2004 and 2008, with authorities recovering ZiG9.4 million (US$9.4 million) in residual assets to compensate affected depositors.
The Deposit Protection Corporation (DPC) confirmed the closure of Afrasia Bank, Interfin Bank, Allied Bank, and Trust Bank, marking the end of a years-long liquidation process.
The recovered funds—comprising cash, treasury bills, and property—will be distributed to creditors and depositors.
Liquidation Process Concluded
Hopewell Zinyau, CEO of the DPC, announced the completion of the liquidation at the corporation’s annual general meeting last week.
“During the period under review, the corporation continued to effectively discharge its mandate as liquidator for five closed banks through asset recoveries and the disbursement of liquidation dividends,” Zinyau said.
“Four liquidation assignments were successfully concluded, with total recoveries amounting to ZiG9.4 million.”
Bank liquidation involves permanently shutting down a financial institution, selling its assets, and using the proceeds to settle outstanding liabilities. Depositors typically receive insured amounts via cheque payments.
Strengthening Deposit Protection
The DPC, established under the Deposit Protection Corporation Act, safeguards depositors when banks fail. Zinyau revealed that the Deposit Protection Fund grew by nearly 10% in the first quarter of 2025, reaching US$16.7 million—up from US$15.2 million at the end of 2024.
“The fund size is the total value of assets and derivatives,” Zinyau explained.
“As of December 31, 2023, we had US$7.8 million. By December 2024, it grew to US$15.2 million, and further to US$16.7 million by March 31, 2025.”
Currently, the DPC covers up to US$1,000 per depositor in commercial banks and US$500 for microfinance institutions. However, due to exchange rate volatility, the corporation is considering raising these limits.
High Coverage for Depositors
DPC Chairperson Canan Dube emphasized that the current protection levels cover the majority of depositors.
“We are able to cover up to 96% of individual accounts up to US$1,000,” Dube said.
“For microfinance institutions, coverage stands at US$500. From that perspective, we are doing quite well.”
Pensioners Still Await Compensation
While progress has been made in bank depositor compensation, thousands of pensioners who lost savings during Zimbabwe’s hyperinflation crisis in 2008 remain in limbo. Grace Muradzikwa, Commissioner of the Insurance and Pensions Commission (Ipec), acknowledged efforts to address the issue but admitted delays.
“We have made headway in dealing with compensation,” Muradzikwa told reporters.
However, critics argue that the process has been too slow, leaving elderly pensioners struggling amid economic hardships.
Restoring Financial Confidence
The DPC’s efforts aim to rebuild trust in Zimbabwe’s banking sector, which saw multiple collapses during the economic turmoil of the 2000s. With the fund’s growth and expanded coverage, authorities hope to prevent a repeat of past crises.
“The idea of a compensation scheme was the right step toward addressing challenges from bank closures,” Zinyau said.
“We remain committed to protecting depositors and maintaining stability in the financial sector.”
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