FIRST Capital Bank (FCB) is taking a significant step towards financial inclusion with the launch of low-cost, no-frills US dollar accounts.
This move comes against the backdrop of Zimbabwe’s banking sector actively targeting the unbanked population through accessible services and digital solutions. FCB’s new offerings include individual savings, group savings, and sole trader US dollar accounts.
Notably, their ‘nostro group savings account’ caters specifically to groups with shared goals, such as burial societies, sports teams, and stokvels.
This account boasts a two percent annual interest rate and eliminates monthly charges, addressing a key pain point for cost-conscious customers. This initiative coincides with rising public criticism of bank fees and the central bank’s strong push for financial inclusion.
The Bankers Association of Zimbabwe (BAZ) recently echoed this sentiment, outlining the industry’s commitment to expanding access to financial services. BAZ’s chief executive, Fanwell Mutogo, highlighted the prioritisation of “increased use of bank cards, digital platforms, and cashless payments” in line with a Monetary Policy Committee resolution encouraging “no-frills” accounts.
This stems from a public outcry over bank fees, raising concerns about affordability and the attractiveness of formal financial services. The central bank, eager to incentivise foreign exchange flows through official channels, is pressuring the sector to reduce fees.
However, Mutogo defended existing charges, citing operational and capital costs associated with service provision. Despite the fee debate, official figures paint a rosy picture. Foreign currency deposits had skyrocketed from $300 million in 2018 to a staggering $16 billion by September 2023. The central bank expects the banking sector to remain resilient, playing a crucial intermediary role.
“Banks must continuously evolve and build financial and operational resilience,” the apex bank stated in a recent report. The sector’s profitability remains strong, with aggregate profits reaching $4,67 trillion for the first nine months of 2023, compared to $341,28 billion in the same period of 2022.
This growth was primarily driven by non-interest income, fuelled by translation gains on foreign currency assets and fees and commissions.