Zimpapers Logo

Business Reporter

Financial sector policies should drive confidence in local banks if they are going to effectively play their financial intermediary role, experts have said.

This was one of the key outcomes of this year’s Zimbabwe Finance Conference hosted by Financial Markets Indaba in partnership with Business Weekly.

Discussants said banks are fundamental to domestic savings mobilisation, but low confidence in the sector was undermining that role.

“There is need for confidence in the banking sector, and that confidence will attract savings, which are critical for the economy,” said Barings Asset Management director Brian Mangwiro in his contribution.

“Without these savings companies are forced to borrow externally, and with current sovereign risk, these borrowings tend to be very expensive. So it becomes a vicious cycle. Policies for the financial services sector need to increase confidence,” he said.

Zimbabwe’s financial services sector has in the past been hit by periods of hyperinflation and currency changes, with the burden of value loss absorbed by the banking public.

This has worked to weaken confidence in the sector, argued analysts.

The conference was funded by Nyaradzo Funeral Group.