Reply to thread

Message

[QUOTE="Munyaradzi Mafaro, post: 40077, member: 636"]
Zimbabwe banks face serious money problems because rich people hide cash outside the financial system. Wealthy citizens keep billions of dollars in safes and secret places instead of putting money into banks. Dr Sibongile Moyo from the Bankers Association discovered this major issue hurting the economy. She leads Nedbank Zimbabwe and recently became president of the banking group. These hidden funds cannot help businesses grow because banks cannot lend money they do not have.

Banks across Zimbabwe control just 3.3 billion dollars in total customer deposits according to recent studies. Lenders already gave out 1.9 billion dollars to borrowers which equals 58 percent of all available funds. Government rules require banks to keep 30 percent of deposits as backup reserves for emergencies. Financial institutions have access to only 12 percent of deposits for daily customer payments and operations. The remaining cash sits locked away from people and companies that need loans.

Most bank accounts are short-term current accounts that customers can empty at any moment. Banks cannot use these deposits for long-term business loans because people might withdraw their money quickly. Foreign development banks have started lending money directly to Zimbabwe banks for longer periods. Real estate buyers pay cash for homes instead of getting mortgages which keeps more money out of banks.
[/QUOTE]

Name