Zim to establish empowerment bank

ZIMBABWE is set to establish an empowerment bank to facilitate financial inclusion of the unbanked, as part of the implementation of the country’s financial inclusion strategy.

Finance minister Patrick Chinamasa said modalities for the establishment of the proposed Empower Bank, including capitalisation, are being developed in consultation with all the relevant authorities.

“Given the constrained fiscal space government is currently operating under, establishment of Empower Bank will not be seeking funding from the fiscus,” he said.

Economic analysts, however, said the establishment of the micro finance institution might take longer than anticipated due to the current liquidity and cash crisis coupled with declining economic conditions.
This was after the country’s efforts to set up  a women-oriented financial institution have stalled for the past six years due to capital constraints.

Deputy Women’s Affairs minister Abigail Damasane recently said despite efforts by the government to establish  Women’s Micro-Finance Bank, funding has remained elusive.

“A bank is a cave whereby you put money where it will be deposited and withdrawn.  Those are the services of a bank — be it micro-finance, commercial bank or otherwise. So, as soon as the money is available, the infrastructure will be in use,” she said.

Damasane noted that in line with the establishment of the bank, which was mooted in 2010, a tender was flighted in 2015 to recruit consultancy to establish the bank and the selected consultancy, KPMG was engaged in September 2015.

She added that the central bank has been handling the process of the registration of the Women’s Micro-Finance Bank since last year while the ministry of Finance has put aside a substantial amount that will act as seed money to start up the bank.

“Board members to do with banking and taking into account gender parity have been recommended by the ministry and the consultant has submitted the names and curriculum vitaes of the recommended proposed board of directors to the Reserve Bank of Zimbabwe for their scrutiny and recommendations,” she said.

If established, the bank will see women from all walks of life accessing funding to various projects being undertaken across the country.

Economic experts say the establishment of the women’s bank will help integrate the majority of women into the formal financial system.

This comes as the financial exclusion of women is a global problem with more than 1,3 billion women in the world operating outside the formal financial system.

This situation is mirrored in Africa where more than 70 percent of women are financially excluded and where women’s access to finance and financial services is consistently behind that of their male counterparts.
Analysts say accelerating women’s financial inclusion thus requires bold and sustained action to advance women’s economic opportunities and rights and to ensure that they can meaningfully participate in the economy without undue constraints and barriers that limit their progress.

Bankers Association of Zimbabwe advocacy officer Clive Mphambela said women are a powerful force in the global economy with significant untapped business potential.

“By harnessing the immense potential of women in business, financial institutions can achieve a lot of success and reap positive benefits,” he said.

“Investing in women businesses is, therefore, no longer driven by corporate social responsibility, but is firmly recognised as a smart thing and a business imperative for banks,” he added.

Mphambela noted that local financial institutions can benefit from the multimillion dollar female economy.
“Clearly in our Zimbabwean set-up banks can do a lot more to promote financial inclusion of rural women entrepreneurs. The first challenge banks face in assisting this sector emanates from the fact that the project proposals that are presented lack bankability,” he said.

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