By A Correspondent
HARARE – The Bankers Association of Zimbabwe (BAZ) has issued a stark warning about the devastating effects of private cash hoarding, accusing the country’s wealthiest individuals of undermining the national economy by keeping billions of dollars outside the formal financial system.
In a scathing critique of Zimbabwe’s shadow banking culture, Sibongile Moyo, the newly appointed BAZ president and managing director of Nedbank Zimbabwe, painted a grim picture of how a few cash-rich individuals have become “de facto banks”, hoarding funds in vaults, safes, and even under mattresses.
“A lot of money is circulating outside the formal banking system. I think individuals have almost become like banks themselves—probably holding more money than what we hold in the banks,” Moyo said. “That money is effectively not working for the economy because it’s sitting outside the formal channel—we can’t use it to lend.”
The impact is massive. Zimbabwe’s entire formal banking sector holds just US$3.3 billion in deposits, a figure dwarfed by the suspected volume of unbanked wealth. Of that US$3.3 billion:
US$1.9 billion (58%) is already committed to loans,
30% is locked in statutory reserves and regulatory requirements,
leaving just 12% available for everyday banking operations, including interbank settlements and liquidity needs.
“So look, the entire market only has US$3.3 billion of deposits, which is a very small pool from which to lend,” Moyo emphasized. “We are already lending most of it, and what remains cannot support meaningful growth or economic transformation.”
According to Moyo, the core of the issue lies not only in hoarding but also in the structure of deposits, which are mostly short-term and volatile.
“There is no capacity to lend long-term because more than 70% of deposits are current accounts—people who want their money the next day. You can’t transform that into long-term assets,” she said.
Adding to the challenge, Zimbabwe’s capital and bond markets are shallow, forcing banks to act as the sole intermediaries of long-term finance, despite being “ill-equipped” for such a role.
With limited local funding options, the banking sector has resorted to external lines of credit to try and bridge the gap. But this is neither sustainable nor ideal, especially for an economy already facing credibility challenges in the global financial market.
BAZ is now calling for urgent policy measures to incentivize formal banking, restore trust, and address the root causes of hoarding—chief among them being economic uncertainty, lack of confidence in the financial system, and regulatory loopholes that allow hoarders to operate with impunity.