Overview of Zimbabwean Banking Sector (Part One)

Business people build their business within the context of an environment which they sometimes may well not have the ability to control. The robustness of your entrepreneurial endeavor is proven by the vicissitudes of the environment. Within the environment are forces that may provide as great opportunities or menacing threats to the survival of the enterprisinggo-getting, gumptious, pioneering, up-and-coming venture. Entrepreneurs need to understand the environment within which they operate to be able to exploit emerging opportunities and mitigate against potential risks. Ledarskapsutveckling stockholm

This information serves to create an understanding of the forces at play and their effect on consumer banking entrepreneurs in Zimbabwe. A brief historical overview of banking in Zimbabwe is carried out. The impact of the regulatory and monetary environment on the sector is assessed. A great analysis of the framework of the banking sector facilitates an appreciation of the underlying forces in the industry. 
Historical History

At independence (1980) Mvuma, zimbabwe had a complex banking and financial market, with commercial banks mostly foreign possessed. The country had a central bank inherited from the Central Bank of Rhodesia and Nyasaland at the winding up of the Federation.

For the first few years of independence, the government of Zimbabwe would not get in the way with the banking industry. There was neither nationalisation of foreign banks or restrictive legislative interference on which sectors to account or the interest levels to charge, despite the socialistic national ideology. However, the government purchased some shareholding in two banks. This acquired Nedbank’s 62% of Rhobank at a good price when your bank withdrew from the country. The choice may have been determined by the need to stabilise the banking system. The bank was re-branded as Zimbank. The express did not interfere much in the functions of the bank. The Express in 1981 also combined with Bank of Credit rating and Commerce International (BCCI) as a 49% aktionär in a new commercial bank, Bank of Credit rating and Commerce Zimbabwe (BCCZ). This was absorbed and converted to Commercial Standard bank of Zimbabwe (CBZ) when BCCI collapsed in 1991 over allegations of deceitful business practices.

This should not be viewed as nationalisation but in collection with state policy in order to avoid company closures. The shareholdings in both Zimbank and CBZ were later diluted to below 25% each.
In the first 10 years, no indigenous bank was qualified and there is no evidence that the government had any financial reform plan. Harvey (n. d., page 6) cites the following as data of insufficient a logical financial reform plan in those years:

– In 1981 the us government explained that it would encourage non-urban banking services, however the plan was not implemented.
– In 1982 and 1983 a Money and Funding Commission was proposed but never constituted.
– By simply 1986 there was no mention of any financial reform agenda in the Five Year National Creation Plan.

Harvey argues that the reticence of obama administration to intervene in the financial sector could be explained by the truth that it would not want to jeopardise the interests of the white population, of which bank was an integral part. The country was susceptible to this sector of the citizenry as it manipulated farming and manufacturing, which were the mainstay of the economy. The state of hawaii adopted an old-fashioned method of indigenisation as it had learnt a class from other African countries, whose economies almost flattened due to forceful eviction of the white community without first making a system of skills transfer and capacity building in the dark community. The financial cost of inappropriate intervention was deemed to be way too high. Another plausible reason for the non- intervention coverage is that the Condition, at independence, inherited a highly manipulated economical insurance plan, with tight exchange control mechanisms, from its forerunner. Since control of international currency afflicted power over credit, the government by arrears, a new strong control of the sector for both economical and personal purposes; hence it would not need to meddle.