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INSTITUTE OF BANKERS OF
ZIMBABWE
First Issue 2021 BANKERS MAGAZINEManufacturers Of: Fireplaces, Sliding Gates, Garage Doors,
Braai Stands, Window / Door Frames, Burglar Bars, Palisade Fencing,
Waste Incinerators, Tank Stands, Expanda / Security Screens,
Fireplace Decorations & Steel / Metal Fabricators
Arc Sliding Gates
Sliding Garage Doors
Hotline & Whatsapp: 0772 446 633
Tel: 024 2006441 Tel: 024 2756128
0719 417 874Contents
Bank’s digitisation strategy pays off 2
Don’t let fraudsters take what is yours 4
Understanding concept of force majeure in the wake of
Covid-19 pandemic 6
Celebrating women in banking 8
a n ' s N o t e
Combating corruption and bribery in the banking sector10
How microfinance can strive and survive under the
Chairm
MR ADMORE KANDLELA F.I.B.Z.
Covid-19 storm 12 WHY CONTINUING PROFESSIONAL
DEVELOPMENT (CPD) IS KEY FOR
Atlas Convention 16 FINANCIAL PROFESSIONALS?
Y
One on One with First Capital’s Commercial Director 18 ou don’t stop learning after you
complete a professional quali-
A guide to the Companies and other Businesses 20 fication. CPD is about plan-
ning, recording, reflecting and act-
ing on ongoing learning.
Employers often see CPD as a
way to get more from their employ-
ees. But what they often overlook
is how important it is to employee
retention especially the millennials.
In a survey on CPD, 90% stated
that development was essential for
a job, and it was found that 40% of
Published by: employees who were not presented
with opportunities for development
in their organization left their posi-
News Worth Knowing
tion within 5 years.
for the Institute of Bankers of Zimbabwe
2nd Floor, Green Bridge South,
Eastgate Complex, Harare, Zimbabwe The only way to counteract this
Web: www.financialgazette.co.zw
Tel: (+242) 781 571-9 is to give your employees the tools
needed to understand new prod-
EDITOR: MOLINE KHUMALO
ucts and technology while building
Editorial : Kuda Chideme, Adelaide Moyo on prior knowledge.
SALES & MARKETING
Team Leader: Edwin Vengesa Financial institutions cannot
Head of Advertising: Shingirai Chirikuutsi
Sales Executive: Susan Mapininga, Christinah Machaka
afford to neglect their employees’
development in this day and age.
PRODUCTION
Head of Production: Kudzai Rushambwa
The field is changing by the minute,
Design: Godfrey Wozhele, Vimbainashe M. Dondo and CPD is essential not only for
Photography: Freedom Mashava
your team to be able to stay on top
If you have an article and would like it published contact us on
of the trends, but for your Bank to
Email: moline@iobz.co.zw stay relevant as well.
IOBZ www.iobz.co.zw
1Bank’s digitisation
strategy pays off
Whilst the negative effects of the Covid-19 pandemic continued to be felt throughout 2020, the bank
successfully leveraged on its digital platforms to achieve operational efficiencies - Ralph Watungwa
By Adelaide Moyo wallets, bulk payments and re-
mote issuance of debit cards,”
F
INANCIAL institutions’ she said in a statement ac-
digitisation strategy is companying the bank results
paying off as the bank- for the year ended December
ing experience moves from 31, 2020.
the brick-and-mortar business CABS said it witnessed
model, with several banks re- an increase in the adoption of
cording an increase in income. various digital channels which
The devastating Covid-19 include the USSD platform,
headwinds and the need for mobile app, POS channels
technological advancement and internet banking during
has forced Zimbabwean com- the year ended December 31,
panies to accelerate digitisa- 2020.
tion. “The society’s investments
NMBZ Holdings Limit- have also allowed us to re-
ed’s (NMBZ) continued its main at the forefront in terms
aggressive drive to leverage of POS channels and efforts
on digitisation of its services, are underway to improve our
with fees and commission in- strong foundation. Cybercrime
come increasing 835 percent continues to be a major risk
to $815,54 million for the year to the banking sector and our
ended December 31, 2020 clients. To minimise the risk
from $87,24 million. to our clients, the society em-
Resultantly, the group re- barked on an exercise to issue
corded a 499 percent year bank cards with chip and pin
on year growth in revenue to functionality,” Mehluli Mpo-
$1,44 billion in the full year livery channels and electronic StanChart recorded a prof- fu, CABS’ managing director,
from $250,77 million in the pri- banking (e-channels), market it of $190,4 million during the said.
or period bolstered by strong growth in the loan book and year ended December 31, EmpowerBank said dig-
performance in the digital foreign currency generation 2020 compared to a restated ital channels continue to be
banking platforms. strategies. loss of $1,5 billion in the pre- critical, especially with the
NMBZ said its digital strat- “Non-interest income in- vious year. Covid-19 pandemic, and the
egy was launched at the most creased remarkably by 802 “Whilst the negative effects microfinance bank will be in-
opportune time as it has been percent in historical cost terms of the Covid-19 pandemic vesting more in these chan-
instrumental in driving busi- to $496,3 million from $54,9 continued to be felt through- nels.
ness within the Covid-19 in- million achieved in the prior out 2020, the bank successful- First Capital Bank (FCB)
duced circumstances. year. This growth was on the ly leveraged on its digital plat- commercial director, Mute-
“The bank has recorded back of increased transac- forms to achieve operational mwa Ushewokunze, recently
significant growth, expan- tional volumes on our digital efficiencies,” Watungwa said. said the financial institution is
sion and improvements on its banking platforms, supported Nedbank Zimbabwe (Ned- constantly working to contin-
digital platforms and this has by increased investment in our bank) said digital technology ually enhance its processes
resulted in enhanced service digital infrastructure,” he said. investments it made in 2020 through digitisation.
delivery,” NMBZ said. Total income from POS put it on a solid foundation. “As the industry faces a
Agricultural Bank of Zim- machines for the year 2020 Sibongile Moyo, the bank’s wave of innovation, it is fair to
babwe (Agribank), now the accounted for 40 percent of managing director, said the fi- predict a future comprising of
Agricultural Finance Compa- total non-interest income. nancial institution made huge branchless or tech-only offer-
ny Holdings’ profit before tax Ralph Watungwa, Standard strides with financial technolo- ings, over and above digital
increased by 1 086 percent to Chartered Bank Zimbabwe gy partners during the year, to driven money transfer options
$569,1 million during the year (StanChart) chief executive enhance delivery channels for already seen in the market-
ended December 31, 2020 said in the Consumer, Private products and services. place today,” he said.
from $47,9 million in the prior and Business Banking (CPBB) “Digital enhancements in- “We are working on various
period. segment, 95 percent of cus- creased mobile banking and projects that are very close to
Elfas Chimbera, the bank’s tomer transactions are done on online internet banking capa- market launch and will signifi-
chief executive, attributed the non-branch channels, which is bility, adding multi-currencies, cantly increase user experi-
profitability on improved reve- a significant shift compared to online onboarding of new ence on our platforms across
nue contributions from ICT de- the past few years. accounts, transfer to mobile both retail and commercial.”
23
Don’t let fraudsters
take what is yours
By Lucas Chirume
I
N TODAY’S digitally driven world where
financial technology such as dual cur-
rency ATMs, mobile banking (USSD), on-
line banking, mobile banking applications
and debit cards which banks are offering
to increase customer convenience, fraud-
sters have also relentlessly increased their
levels of sophistication to manipulate and
cheat people of their hard earned funds. Romance scams ming, swapping of cards and the trapping
To effectively deal with the risks, both Fraudsters pretend to court victims on of cards inside the ATM. Once details are
banks and clients need to collaborate in dating sites, but never meet them. They stolen there are various ways funds are
the fight against fraud. then request money for things like medi- then used.
There are many types of financial fraud cine or travel. The money is paid into an Counterfeit cards
that individuals need to look out for, one overseas account and immediately with- Fraudsters will produce a counterfeit
of them being payment fraud also known drawn, making it difficult to recover. card based on your card details to make
as payment scams. Payment scammers Money mule unauthorised face to face purchases
target victims by deceiving them into Scammers ask victims to receive or where Chip & PIN technology has not yet
spending or receiving money. They target transfer funds for a small fee. It sounds like been rolled out and merchants and issu-
their victims using phones, emails, text easy money but by agreeing, you may be ers continue to rely on magnetic stripe.
messages, social media and advertising. unknowingly laundering criminal revenues Card not present transactions
Payment scams can come in many differ- and participating in crime. Never agree to Fraudsters make unauthorised pur-
ent forms, with the most common being: transfer money for people you don’t know. chases over the internet, phone or mail
Advance-fee scam Boiler room scams using card details from a lost or stolen
A request for upfront payments be- These are hard sell tactics that pres- credit/debit card or card details.
fore a prize is released. You first receive sure you to invest in high-return bonds/ Account takeover
a call informing you that you have won a shares offered for a very limited period. Where a fraudster assumes your iden-
prize. Before receiving the prize, you are Investment funds are transferred to an tity on your existing card/account to make
required to pay the courier, processing offshore account, never to be seen again. purchases and transact.
and customs fees. Payments are usually Sometimes fraudsters will create fake Fraudsters are always devising new
to an overseas account but after these bonds using the name of a real company ways to scam unsuspecting people. Al-
payments are made, the prize remains ― but that company has no connection at though as banks we will continue to de-
elusive. This scam is also known as the all with the bonds. ploy fraud prevention mechanisms, the
‘419 scam’. Debit/credit card fraud best safeguards will always be the good
Fake emergencies Another common type of financial fraud judgment and vigilance of you, our valued
This could be a social media post of a is debit/credit card fraud. Card fraud tar- clients.
child requiring funds for critical surgery or gets victims by firstly stealing their card To learn more about the various types
a call pretending to be from the hospital or or its data: name, number, expiration date of fraud and how to protect yourself, visit:
police informing you that your relative has and CVV number then spending the avail- https://www.sc.com/en/about/fighting-fi-
had a life-threatening accident and needs able funds as soon as possible. Fraud- nancial-crime/#fighting-fraud.
a cash deposit before a life-saving medi- sters get these details online via malware, � Chirume is Head, Consumer, Private
cal procedure is undertaken. phishing emails or sometimes in person and Business Banking, StanChart.
at ATMs by shoulder surfing, card skim-
45
Understanding concept of force majeure
in the wake of Covid-19 pandemic
By Rumbidzai Mukarakate
LLBS (UZ) AIBZ
F
ORCE majeure is a French term which
can be translated to mean “greater
force.” The concept was explained in
the case Flamman and Company v Koks-
tad Municipality 1919 AD 427 where Solo-
mon ACJ stated that if a person is prevented
from performing his contract as a result of an
event that the parties could not have antici-
pated or controlled, he is discharged from li-
ability. This was further buttressed in the case
of acting Minister of Industry and Anor v
Tanaka Power (Private) Limited 1990 (2)
ZLR at 208 where it was stated that the gen-
eral rule in our law is that if as a result of vis
major or other supervening physical or legal
act performance of a contract has become
impossible through no fault of the debtor,
the obligations under the contract are extin- national lockdown is in force. [2015] ZWHHC 660 it was explained that
guished. The Covid-19 pandemic has made This means that for a contract that re- force majeure “will not avail the defendant
it difficult for parties to a contract to perform quires physical attendance of the parties the if the impossibility is self-created, nor will it
their obligations mainly due to the lockdown lockdown can be considered as force ma- avail the defendant if the impossibility is due
imposed by the government. It is therefore jeure. However, if the parties fall under the to his or her fault.” The courts will look at the
important to assess if the Covid-19 pandem- “essential services” providers then the force circumstances of the case for example the
ic can be described as force majeure and as majeure concept cannot be invoked since date on which the contract was entered into
such extinguish obligations under contracts. the parties will not be affected by the nation- vis-a-vis the time when the pandemic broke
The courts respect the doctrine of sanctity of al lockdown and they can still perform their out. A contract entered into in the middle of
contract and as such they are not quick to contractual obligations. For example, banks the pandemic cannot be treated in the same
invoke the doctrine of force majeure. In or- will not be exempted from performing their way as a contract concluded way before the
der for them to invoke the concept of force contractual obligations in a contract that re- pandemic. Each case will depend on its own
majeure the courts look at the nature of the quires physical attendance because Statu- merits.
contract, the relation of the parties, the cir- tory Instrument 200 of 2020 Public Health Nature of the impossibility
cumstances of the case and the nature of the (Covid-19 Prevention, Containment and The nature of the impossibility can either
impossibility. Treatment) (National Lockdown) (Consol- be temporary or permanent impossibility. A
In the case of Firstel Cellular (Private) idation & Amendment) Order, 2020 defines temporary impossibility arises where the ob-
Limited v NetOne Cellular (Private) Limited essential service to include “banking insti- ligations of the contract can be fulfilled after
[2015] ZWSC 01 it was held that; tutions, bureaux de change, money transfer the obstacle is eliminated. If the obligations
It is trite that the courts will be astute not services.” in a contract can still be performed after the
to exonerate a party from performing its obli- Relationship of the parties disease is eliminated then the impossibility
gations under a contract that it has voluntarily The relationship between the parties is can only be a temporary one. On the other
entered into at arm’s length. Thus, the sus- also important when deciding if an event can hand a permanent impossibility arises where
pension of a contractual obligation by dint of be classified as force majeure. For instance, the obligations of the contract cannot be ful-
vis major or casus fortuitous can only be al- if the parties are debtor and creditor the per- filled even after the obstacle is eliminated.
lowed in very compelling circumstances. The formance of the contract may be postponed The courts will look at the nature of the im-
courts are enjoined to consider the nature of until the effect of the disease is eliminated. possibility to conclude if the concept of force
the contract, the relationship between the However, in some cases the contractual re- majeure can be applied.In order to conclude
parties, the circumstances of the case and lationship may become extremely intolerable if the Covid-19 pandemic can be classified
the nature of the alleged impossibility. for the parties due to the indefinite duration as force majeure the courts look at the nature
The nature of the contract of the disease. In situations like these the of the impossibility, the circumstances of the
The courts will look at the nature of the disease may be accepted as permanent case, the relation of the parties and the na-
contract to see whether the doctrine of force impossibility. With the hyper-inflationary en- ture of the contract. The Covid-19 pandemic
majeure can be applied. For instance if a vironment in Zimbabwe, performance of a has proved to the bankers that it is important
contract requires physical attendance for it to contract under the debtor-creditor relation- to include force majeure clauses in contracts
be performed then the imposition of a nation- ship may be classified as a permanent im- and that the force majeure clause must in-
al lockdown by the government due to the possibility as the money will be continuously clude pandemics like Covid-19. This is so
Covid-19 pandemic can be viewed as force losing value for the duration of the pandemic. because the law is clear that no term will be
majeure. Statutory Instrument 10 of 2021 Circumstances of the case implied into a contract as parties have free-
Public Health (Covid-19 Prevention, Con- The event that constitutes force majeure dom to contract. It is therefore important to
tainment and Treatment) (National Lock- should take place outside the control of the pay attention to what is included in the force
down) (No.2) (Amendment) Order 2021 parties. It should not be possible to foresee majeure clause when drafting contracts.
(No.9) imposed a national lockdown in a bid the event at the date of commencement of
to curb the spread of Covid-19. It states that; the legal relationship or to predict that the Rumbidzai Mukarakate is a legal practi-
Notwithstanding anything to the contrary concrete effect of the event should be so tioner registered with the High Court of
in this order, for a period of 30 days with ef- great if the event is foreseen. In the case Zimbabwe and an associate of the Insti-
fect from the 3rd January, 2021, a Level IV of Chinyakata V Crystal Cabs and Anor tute of Bankers of Zimbabwe.
67
Celebrating women
in banking
By Dr Sibongile Patience Moyo In the local banking indus-
F
try women constitute 42,7
INANCIAL intermediation services of- percent of bank employees,
fered by banks play a significant role with three quarters occupying
in most economies, with value-added non-managerial roles, and with
contribution to gross domestic product three out of every 10 executive
ranging from five to 15 percent, and corre- committee roles being held by wom-
sponding impact on employment. en.
The core of the inclusion agenda is Over the last two decades there
achieving gender equality and empower- have been five women CEOs of com-
ing all women and girls under sustainable mercial banks under the BAZ. When
development goal number 5 of the 2030 we conduct a deep dive into the com-
United Nations Agenda for Sustainable position of bank executive commit-
Development. tees, we find even fewer women in
Globally, women make up 52 percent the high-powered roles dominating
of banking sector employees thus portray- value on the balance sheet and
ing a picture of equal representation. with potential for ascension to the
Unpacking this simple statistic reveals chief executive role.
a funnel effect where women average 38 This picture reflects exclu-
percent of middle management and 16 sion of women from real de-
percent of bank executive committee cision-making influence in
members, according to Professor Michel financial institutions and
Ferrary’s 2018 Gender Diversity in the accentuates inequality.
Banking Industry report. With automation
The study examined the female rep- and digitalisation
resentation of 71 banks in 20 countries trends, women who
and found that women in the global bank- dominate frontline re-
ing sector are faced with a ‘double glass tail and customer service
ceiling’ effect where, of those who reach roles may become casual-
middle management, far fewer are able to ties of optimisation initia-
ascend further to executive roles. tives, further reducing their
The phenomenon is slightly reversed representation if we do not
on bank boards of directors where women choose to challenge and
are better represented due to quota-based lead inclusive change. What
diversity standards imposed to mitigate can we do to achieve a gen-
risk. der balanced banking indus-
These standards observed on boards try following the recruitment
of prominent banks are a result of numer- process, which at the outset
ous studies that portray women as less should be conscious about gen-
likely to gamble with assets. der representation?
Notably, women were conspicuous We have to be intentional about
by their absence from the leadership of mentoring, sponsoring, coaching and
the worst offending firms during the 2008 exposing young professional women
global financial crisis. to networks that will build their career
The 2020 edition of the Oliver Wyman prospects progressively.
Women in Financial Services report shows We have to be intentional about
positive strides in inclusion, with 20 per- co-creating career paths that lead to in- growth
cent representation of women on execu- clusion of high potential women in senior as they navigate vari-
tive committees and 23 percent on boards. executive roles within the core business of ous stages in family life.
However, this masks the nuance that the bank and with leadership span of con- We need to set internal goal com-
only six percent of the chief executive of- trol, away from the old preserve of women mitments for gender inclusion and career
ficers (CEOs) of the largest global finan- in enabling functions and corporate ser- mobility and measure these whilst being
cial service firms are women and that the vices. held accountable for their performance at
largest global banks are led solely by men. With the increasing dominance of management and at board level. Finally, as
In South Africa, home to the largest banks technology in banking we must spon- women we must lead from the front and
in Africa, there are currently no women sor, mentor and coach women in STEM role model by raising the voice and visibili-
amongst incumbent bank CEOs, with two programmes to generate a pipeline of ty of fellow women in financial institutions,
women having been at the helm of South women with technology skills and lead- thereby giving them currency and creating
African banks in the last decade. ership efficacy and confidence to lead tangible succession.
Within the Bankers Association of Zim- banks.
babwe (BAZ) stable of 17 financial institu- With the new ways of work character- ● Dr Moyo is Managing Director of
tions ― 13 commercial banks, two build- ised by changed management styles, flex- Nedbank Zimbabwe. She is also the
ing societies, one savings bank and one ible work hours and remote working we Vice Chairman of Council of Institute of
infrastructure development bank ― we find retention and inclusion opportunities Bankers of Zimbabwe.
currently have one woman-led institution. for women by reducing barriers to career
89
Combating corruption and
bribery in the banking sector
By Canaan Dube what he is doing. Much more importantly
C
he must surround himself with people who
ORRUPTION can be defined as the know what they are doing. Skills set must
betrayal of trust, fiduciary involve qualification, experience and the to-
responsibility and stewardship or the tal person concept.
abuse of public office and entrusted power COURAGE
for personal and/or private gain based on A commitment to sit down at the nego-
bias. tiating table and talk. Courage in the busi-
“Official corruption...thrives on darkness ness leadership sense is not bravado. It
and invisibility. It is anonymous and immea- means taking a position even if it makes
surable. It is rooted in the very human vices one unpopular. Is where fear has said its
of greed and lust for power through wealth... last prayers – Karl Bath, theologian. Doing
defying...normal approaches to definition what you are afraid to do. There can be no
and measurement ... Corruption is colour- courage unless you are scarred. Willingness
less, shapeless, odourless, collusive, secre- to take risk. 3 Is Independence, Integrity,
tive, stealthy and shameless. Even when it vation through efficient information technol- Intuition
is pervasive, it still retains these qualities. It ogy (IT) systems to minimize human contact INDEPENDENCE
often leaves no trail but that impressed in and combat corruption. Independence of the actors in the bank-
human minds, memories and perceptions” Paradoxes faced by the banking sector ing sector – what does it mean?
Constanze Bauer in an article entitled actors o Institutional independence - test
“The disease called corruption” and quoting Banks may be receivers and custodians of o Doctrine of separation of powers.
with approval Guyden Dwivedi and Jabbra illegal money often without being aware. o Material commercial and other rela-
2001. When aware, the choice is between the eth- tionship test.
Exploring link between corruption and ical duty to customer confidentiality (bank- o Time – 12 years; 9 years – familiarity
corporate governance ing code) and to obey the law (statutory and breeds contempt.“But remember the great-
Governance, derived from a Latin word judge made). est threat to independence is poverty and
“gubenare” meaning “to steer”. Gabrielle Know Your Customer (KYC) is it a fool- lack of resources”
O’Donovan defines corporate governance proof answer?Does this address all the ten- INTEGRITY
as “…an internal system encompass- sions and contradictions in the paradox of An effective leader must be a person
ing policies, processes and people which choice? of high personal integrity, i.e. knowing the
serves the needs of shareholders and other Approaches to tackling corruption difference between right and wrong and
stakeholders, by directing and controlling Holistic, shies away from a silo and regi- having the guts to do the rights thing.Per-
management activities, with good busi- mented one. But is micro-cosmic and not sonal integrity is a child born out of three
ness savvy, objectivity, accountability and macro-cosmic. Takes an inside out and not (3) parents – humility, honesty and trustwor-
integrity…”. Good governance is a process outside in approach. Takes a root cause thiness.
whereby public institutions (through peo- analysis.Begin with the end in mind. INTUITION
ple) conduct public affairs, manage public “Corruption is people, nothing more, Based on the hunch ― what your con-
resources and guarantee the realisation of nothing less. People – you and me are science tells you first is right.Very important
human rights “…without abuse and corrup- the medium through which corruption quality.
tion and with due regard to the rule of law” breeds, thrives and spreads”. The mag- CONCLUSION
(NDS1 paragraph 639). ic formula , 3 Cs AND 3 IS. What should Corruption is not beyond us in the bank-
In combating corruption, focus should be done C&B in all their forms should be ing sector. We have to tackle it head on -
be on people and not on how to perfect reduced substantially (SDG 16.5). The Con- root, trunk and branch. We must start where
systems, structures, rules, laws, which gov- stitution of Zimbabwe section 9(1) obliges it all begins - the me, the you and the us
ern and regulate banks. Focus on people public officers to “expose, combat and actors in the banking sector. That way we
should be on who they are and what they eradicate all forms of corruption”. go some way in preventing, combating, re-
do because what they do derives from who The magic formula: 3Cs, character, ducing and eliminating it. All that starts well
they are. competence and courage. should end well and vice versa. The word
History and evidence of corruption in CHARACTER “begin” is magic. Proper recruitment of
Zimbabwe To be able to prevent, eliminate, combat functionaries of the banking sector is at the
According to Transparency Internation- and reduce C&B you must be a person of heart of any strategy to prevent, eliminate,
al (TI) Zimbabwe the country’s corruption good character, who knows the difference combat and reduce corruption. However,
index averaged 22 (0 implies a highly cor- between right and wrong and who has the the recruitment process must be robust,
rupt country while 100 means a less corrupt guts to do the right thing.Doing things con- transparent, open and inclusive in nature.
country) between 1998 and 2018. sistently in accordance with espoused val- Above all it must be aligned to the magic
The Zimbabwe National Anti-Corruption ues — words and actions must match. quality formula of 3Cs and 3Is.
Strategy (202-2024) points to human con- COMPETENCE Canaan F Dube is the Founder and
tact as the primary cause of corruption. A good and effective fighter of corrup- Chairman of Quality Corporate Gover-
As a result, there has been calls for inno- tion must be competent — he has to know nance Centre
10nbs 11
How microfinance can strive and
survive under the Covid-19 storm
M
FIs have had a taste of change perative for the sector to consider this user id increasingly important for the
on responding to the Covid-19 transformation seriously is important. development of financial services mod-
pandemic, moving rapidly from There are various challenges associ- els. Since MFIs have long struggled with
face-to-face models to incorporate re- ated with digital transformation but there digitising and managing customer data,
mote services functions. Many have un- are also some opportunities presented their ability to gather and use relevant
derstood that complacency is no longer by this digital transformation. To adapt data is central to implement the changes
an option. The trick will be to maintain and survive in this new economy, microf- required to be more competitive, form a
the momentum. Opportunities to survive inance must play its role in various ways risk-based pricing to effective credit risk
business such as digital transformation to support the inclusive finance ecosys- management, form new product design
is a continuous journey of adapting and tem. The microfinance sector must also to customer relationship management,
changing, so it is worth investing In the invest in understanding its customers by from improving operational efficiency
skills and knowledge to do it now and focusing on issues like financial health to growing the portfolio over time. The
well into the future. after accessing micro-loans. It should longer it takes to build these capabili-
Microfinance in Covid-19 demonstrate and invest in its under- ties, the further the MFIs will fall behind
A look at the economic downturn un- standing of the real social structures of in competition and surviving after the
der Covid-19 shows that it has become its customers at the lower end of the storm.
evident that its not going to be a once- food chain and invest in supporting their • Product diversification - MFIs ei-
off shock, but rather a rolling series of real social income structures to support ther need to broaden the services they
crises for the following months and the inclusive finance ecosystem. offer in a way that meets customers’
even years to come. The disruption and Key focus areas: demands and enhances loyalty or find
uncertainty caused by this pandemic • Financial health after accessing mi- a way to make services of third parties
on the country’s economy is worrying. cro-loans. available without losing the customer re-
However, this comes with the motivation • Investing in microfinance customers’ lationship. However, to achieve this goal
to implement solutions that are adaptive social structure. they need better data, as well as more
to this economic behaviour in the microf- • Investing in real social income gen- robust back-office capabilities and tech-
inance sector. Our focus should shift erating schemes to support inclusive nology skills.
away from immediate liquidity needs finance How to appreciate digital
and damage control to build a robust Lessons learnt from digital transformation?
and more resilient microfinance sector transformation To effect business process reengi-
for the future. • Channels - one of the most import- neering, which is change process, it
How do we build back to perform ant insights for microfinance during the will involve more than just investing in
better? pandemic is the need to find new ways technology for digitisation and business
We have noticed the surge of the to reach and interact with customers. transformation after Covid-19. There
fourth industrial revolution in the banking People value convenience and services is need for several conditions to be in
sector where digitisation is the driving that reflect their needs and alternative place for an MFI to at least consider un-
force to reach our customers and pro- channels to access and receive services dertaking digital and business transfor-
vide services during these strange times. during the pandemic are ideal. For ex- mation.
Digital technology presents a challenge ample, agent networks, remote cus- • Understanding new custom-
to the traditional microfinance, and this tomer on boarding and enhanced use er needs - an MFI should ground its
has been going on for some time. Unfor- of call centres. This can be achieved by transformation in a solid understanding
tunately, the pandemic has accelerated integrating with the larger platforms or of what customers need and are willing
this process and the microfinance sector building an organisation’s own channels. and able to pay for. This should be chief
must respond. A presentation of why we If implemented, it has the added benefit among the foundation of its long-term
should invest in digital transformation of of lowering costs and expanding reach. vision and will ensure that core custom-
traditional microfinance and why it is im- • Use of data - data collection and ers stay with the MFI as it grows. MFIs
..continued on page 14
1213
How microfinance can strive and survive under the Covid-19 storm..continued from page 12
have been characterised by a business hoods and low-income earners of the did before the pandemic. Thus, without
model that is simple and easily replica- economy. The lockdown measures repayments and savings, savings groups
ble, but successful MFIs have for most which include closing schools, imposing will not be able to function, leaving pos-
part succeed by evolving over time to a curfew, restricting movement between sible MFI customers without even these
match their customer’s needs and aspi- the capital and the rest of the country, informal financial services.
rations. and closing borders. These measures, How can MFIs survive in this tur-
• Clear strategy - a clear idea on besides protecting public health, had bulent economic environment?
where the MFI wants to go allows the unprecedented direct and devastating By adopting digital transformation
organisation to outline its business plan economic impact on livelihoods, par- and adjusting the skills structure in the
and technology changes required to ticularly for the most vulnerable subsis- MFIs, survival becomes possible. These
get there. The strategy is influenced by tence segments in rural areas and the institutions can collect data to analyse
a technology solution for the business low-income earners. customer expectations, social develop-
model that can survive competition. What most MFIs customers ment influenced by micro-loans and un-
• Commitment and focus - digital face today? derstand the social structural challenges
or business transformation is a massive • Limited role for formal financial their customers face today. Ultimate-
exercise in change management and re- services - formal financial services in ly understanding the financial health
quires significant commitment from the Zimbabwe would not be of much imme- of their customers after accessing the
loan officers all the way to the executive diate help because there is a low rate of loans will influence development of ad-
management on what the business or- financial inclusion in rural areas. A few equate and reliable products that can
ganisation is doing and why. It makes it people in Zimbabwe have acceptable change lives and have takers to keep on
very hard to enact change. In addition, formal financial account activity for ac- generating revenue for business surviv-
the organisation culture plays a big role cessing loans. Most of the low-income al.
in this. MFIs should have a focused and earners and rural poor are excluded from Digital transformation and change
an adaptive approach that enables ad- formal financial services and acceptable management and strategy will allow the
justment and improvement to achieve credit facilities from MFIs and this can MFIs to survive in this turbulent eco-
real transformation and achieve their be an opportunity for MFIs. nomic environment.
goal. • Savings groups severely strained Key areas to develop and improve
• Skills - adequate digital skills be- or suspended - savings groups are well include:
come a necessity when an organisation established in low income earning and • Understand the current Inclusive fi-
adopts digital transformations. However, rural societies in Zimbabwe and most- nance ecosystem.
this is often lacking in many MFIs. ly among women. However, this long • Lessons learnt from financial inclu-
Thus, having core staff with an ability standing social financial mechanism has siveness in social structure.
to assess technology-driven solutions been deeply affected by the pandemic • Lessons learnt from financial health
and guide their adoption will be import- and it will be a challenge to keep sav- after accessing micro-loans.
ant, and these skills are scarce and ex- ings groupings running. Curfews and • Why microfinance should invest in
pensive. It is also important to note oth- lockdown measures make it difficult to social structures of the poor.
er requisite skills that may be affected by have regular, in-person meetings to col- • Why microfinance should invest in
a transformation, including risk manage- lect savings, disburse loans and make real social income generating structures.
ment, treasury, and core IT skills. repayments. The biggest challenge in •
Microfinance customers chal- this economy is that group members will Prepared By:
lenges to meet financial needs in struggle to repay what they owe accord- Prince Hita, Information Systems Re-
Covid-19: Rural livelihoods ing to agreed amounts and deadlines. In search Associate CDFE, CEH, MSc &
The pandemic has further strained addition, they will also struggle to save BSc Information Systems
many aspects of the poor rural liveli- at the same level and frequency as they
14Receive money from
anywhere around the world.
Receive money from
anywhere around the world.
Fast and Reliable services available in all 32 POSB branches nationwide.
PC
D
Fast and Reliable services available in all 32 POSB branches nationwide.
15Atlas Convention
Hosted on an artificial intelligence driven platform, the annual event
essentially ushered Zimbabweans to the world’s biggest online
business community
T
HE annual Atlas Convention brings areas that shape Zimbabwe’s Innovation novations and interventions will enable
together government, the private journey among globalising economies of all economic sectors to accelerate the
sector and academia, converg- the world. pace of achieving the Vision and Agenda
ing experts from all economic sectors The Atlas Convention 2022 series will 2030. More importantly, this will enable
to further open up and enhance the in- focus on commercialisation of Africa’s in- increased production and productivity in
novation space by fostering economic novation as its theme, with a continental agriculture and agro-based industries.
development through innovation driven scope and will focus on bankable initia- Zimbabwe has embarked on its digital
and private sector led economic trans- tives drawn from the different econom- transformation journey by an ambitious
formation. ic sectors through the Atlas innovation Agritech initiative to commercialise ru-
The 2021 inaugural series was suc- challenge. Zimbabwe is aware that the ral homesteads, transforming them
cessfully held under the theme “Igniting continent is facing an enormous future of into productive business units.
Infinite Possibilities”. possibilities in our rapidly evolving digital This will trigger an
The nation is moving to world. New innovations and facilities
reopen the economy emerge across the horizon
with each passing
agriculture
follow- revolution that
ing the lockdowns due to the will allow us as a
prevailing pandemic to create path- nation to mass pro-
breaking initiatives for people to safely duce, mass process
engage in business in the new normal. and mass consume as
Hosted on an artificial intelligence driven we innovate in the agri-
platform, the Atlas Convention essential- culture value chain.
ly ushered Zimbabweans to the world’s The cross-sector
biggest online business community, adoption of the innovation
with some of the key features including year. Gov- ernments, driven and private sector led economic
an annual traffic of +55 million business companies, and individuals must adjust transformation is drawing stakeholders
event goers and +5.2 million subscribed to this new reality as emerging technolo- from local and international universities
businesses across the world. Attend- in the academia, private sector and in-
ees came from +30 countries and from “To harness these dustry players and well as governments.
diverse economic sectors, among them benefits, we have to This initiative’s ecosystems will in turn
organisations like the Pan African Cham- translates to improved production, pro-
ber of Commerce, ZNCC, CZI, the Unit- develop technological ductivity and efficiency primarily in the
ed Nations, Emirates Aviation University innovations and apply agriculture sector.
and the Cape Peninsula University. tools that accelerate To harness these benefits, we have
The rest of the year 2021 will be lined agriculture productivity to develop technological innovations
up with sector specific innovation series and apply tools that accelerate agricul-
that include Sustainable Development and efficiency nationally...” ture productivity and efficiency nation-
Goals (SDGs), Banking and Finance, ally, regionally and globally. Zimbabwe,
Mining and bridging industry and aca- gy become the foundation of our every- however, has much more to offer and
demia as well as international collabo- day activities. gain from the Atlas Convention towards
ration. These sector specific innovation Agriculture, as one of the key focus the attainment of an upper middle-class
events will seek to dwell deeply on key areas has not been spared as ICT in- society.
16Refrigeration &
Refrigeration
Air &
Conditioning
Air Conditioning
Service & Repair
Service & Repair
17ʻThe time to innovate is nowʼ
Seasoned banker, Mutemwa Ushewokunze (MU), was recently appointed First Capital Bank (FCB)
Commercial director. Our Editor, Kuda Chideme (KC) sat down with him to get some insight of the bank’s
operations and strategies going forward. Below are excerpts of the interview.
What is your assessment of adapt, and I believe we are re-
the state of the country’s sponding.
banking sector? Regulation: This remains
The banking sector land- a critical challenge as compli-
scape in Zimbabwe is highly ance and associated costs in
competitive especially when meeting Basel and other do-
one considers the number of mestic rules requires a signif-
deposit-taking institutions in icant allocation of resources.
the country. One might go as Customer expectations:
far as to argue that perhaps Today’s customer is more in-
the economy is over-banked, formed than ever before and
which may lead to cannibali- expects a high degree of per-
sation amongst market play- sonalisation and convenience
ers. In addition, the banking in their digitised banking ex-
offering in some contexts is perience over and above a
very one-dimensional and ge- high sensitivity to costs. As
neric, with limited differentia- the digital migration occurs
tion and intermediary partic- commensurate attention to
ipation. Notwithstanding, the detail is required to balance
desire to innovate is not lack- the needs of the old and the
ing, as a highly fluid operating new customer. In conclusion
environment can only result in the digital move raises secu-
advancement. It is encourag- rity risks as we are required
ing to see that despite risk and Mutemwa Ushewokunze to ensure that measures are
volatility concerns foreign par- Commercial Director, First Capital Bank Limited in place to ensure safe custo-
ticipation remains ever pres- dy of not only money but also
ent. As First Capital we par- driven money transfer options Other risks we may face are as personal information.
ticipate in this alongside other already seen in the market- follows; The central bank has
banks, which is important for place today. Increased competition: expressed concern over
the diversity of the industry. The banking landscape Fintech is targeting the most low loans-to-deposits ra-
The presence of microfinance is changing at a rapid pace, profitable areas in financial tios among local banks, are
institutions, and development with new complexities aris- services and will divert reve- there issues that are keep-
banks are also necessary for ing every other day. What nue from traditional offerings. ing banks from lending and
our national economic devel- would you say is the biggest Culture of innovation: what is First Capital Bank’s
opment in serving under-ser- risk facing the local banking Manual processes and sys- current approach to lend-
viced or unbanked groups. industry today? tems are being replaced by ing?
Most estimates place Zimba- Policy will always remain digital solutions — artificial As an industry we have
bwe’s unbanked population key as the banking industry intelligence pops up in most experienced several ‘non-per-
at between 30-40%, which is continues to evolve, but our conversations and it is critical forming loan’ (NPL) cycles
around the regional average. greatest challenge is in keep- that management teams em- which have had self-fulfilling
As the industry faces a wave ing pace with global develop- body a culture of innovation. outcomes and have deterio-
of innovation, it is fair to pre- ments and ensuring we remain Tech-first is no longer a phe- rated the integrity of the bor-
dict a future comprising of integrated as technological nomenon, but rather religion rower-lender mechanism. The
branchless or tech only offer- advancements become main- in global banking and so it adage, ‘once bitten, twice shy’
ings, over and above digital stay in the financial sector. means as an industry we must perhaps describes the lending
The time to innovate is now...continued from page 20
1819
The time to innovate is now...continued from page 18
attitude of the banking sector and being cided with good rains which will serve to and Reverse Billing have recently been
over-cautious is median behaviour. This is underpin the expansion of the agricultur- launched to market. Alisa will materially
not likely to change in the near to medium al sector and perhaps an oversupply of improve our retail client’s customer expe-
term. For banks, the main consideration is agricultural produce could create a tail- rience, our goal is that it becomes a ubiq-
whether they can create economic value wind for lower inflation. There is a lot of uitous in-app experience. We have also
in the current environment, and the pres- preparation going on for this year’s winter launched Infini-Pay, which is a simple and
ent signals provided by prevailing inter- crop and producers need to be well fund- efficient online bulk payments solution for
est rates suggest that risks in the market ed. Over and above that the economy is our business customers allowing them
economy remain high. opening steadily post the second wave, to initiate these transactions to accounts
At First Capital Bank our strategy is and as the vaccine proliferates, we expect within and outside First Capital Bank
to broaden our lending strategy into the a healthy demand for capital into Q2, Q3 Limited. We continue to work on several
SME and Micro-SME space. It is a play on and Q4. Suffice to say that here at First exciting projects which we fully expect to
this idea of the “missing middle,” and we Capital Bank we have a positive econom- positively shift our customer experience
believe that in our developing economy it ic outlook in the balance of the year. journey and make us more competitive in
is these enterprises that form the base of Our local currency lending is currently the market.
strong economies. SMEs still need insti- at c70% to deposit ratio (LDR) whilst our The Reserve Bank has also raised
tutions that they can trust, but also ones USD lending has been slower, with both alarm over poor KYC practices by local
who understand their needs and con- the bank and customers taking a more banks, what measures has First Capital
texts, while providing for their financial cautious approach. Bank put in place to ensure diligence?
requirements. We have observed that this The central bank says there is very First Capital Bank adheres to best
segment is underserviced and the best little compliance to laws that require practice standards of KYC requirements
way to overcome information asymmetry banks to pay interest on all accounts, as set out by the regulator. These prac-
issues in the segment is to walk side-by- is FCB complaint? tices fit within the broader scope of the
side with them on their entrepreneurial Within our organisation we assign in- banks Anti-Money Laundering policy. We
journey. terest to our bank specific deposit related are constantly working to continually en-
What is the current size of your loan products such as fixed deposits and so hance our processes through digitisation,
book and how have you managed it in on. As an industry there are certain issues which helps in the optimisation of data
the wake of the Covid-19 constraints? around interest payment issues that are collection while limiting human error. We
Is the bank also lending in foreign cur- currently being handled through BAZ and also acknowledge that KYC is an on-go-
rency? the Central Bank. ing process, and we are establishing
Our loan book has been growing and Can you give us an insight of the pathways to ensure that we know our cli-
through the pandemic we have seen lim- bank’s digital strategy going forward? ents through the cycle of their relationship
ited impact. You must remember that We are working on various projects with us.
there are segments of the economy that that are very close to market launch What corporate banking products
continued to function throughout the and will significantly increase user ex- should your customer look forward to
lockdowns. In fact, the non-discretion- perience on our platforms across both under this period?
ary segment of the consumer economy Retail and Commercial. First Capital We are working on some interesting
seemingly accelerated. This has coin- Bank’s WhatsApp Banking Chatbot, Alisa products which should be well suited for
the domestic market. Beyond our SME
intentions which have already been ex-
plained, we believe that over the coming
seasons there exists significant oppor-
tunities in the agriculture space, and we
are working on a competitive offering
across several agricultural commodities.
In addition, we have embraced the view
that we have entered a commodities su-
per cycle and therefore small-to- medium
scale mining space will present funding
opportunities. The FMCG value chain
cannot be ignored, and we are curating a
platform that meets this segment’s need
for financing. We also believe that there
is a demand to get creative by leveraging
off both private and public markets in or-
der to raise capital, we believe within this
scope we could find a solution to the lack
of longer-term instruments in the market.
Over and above this our commercial
team has a depth of experience, superior
customer service, and execution capabil-
ities that support our traditional product
offering.
We believe it is an exciting time for
Zimbabwe as we emerge from the pan-
demic, there is some capacity that needs
to be restored and growth will return to
the market, this is inevitable.
No matter the circumstances, we
maintain a positive outlook on what is to
come and as First Capital Bank we are
looking to maximise on the opportunity.
For us #BeliefComesFirst
20The Companies & Other
Business Entities Act corporate world. The Zimbabwe-
By Nqobile Munzara and There- an economy is largely about the
sa Muchinguri activities of companies and other
I
business entities. He states that
n November 2019, the the legislation being focused on
Companies and Other Busi- deals with one of the most dom-
ness Entities Act (Chapter inant institutions of the well-be-
24:31) (“COBE Act” or “the new ing of humanity. In his opinion,
Companies Act”) was promul- the authors’ choice of subject is
gated in Zimbabwe, stating that therefore compelling, appropri-
it would repeal the Companies ate, timely and admirable.
Act (Chapter 24:03), which had Prof Madhuku describes the
been passed in 1952 and the structure of the Guide as out-
Private Business Corporations standing. He says that each of
Act (Chapter 24:11), which was the 304 sections of the COBE
enacted in 1993. Section 1 of Act are explained with consid-
the new Companies Act states erable depth and clarity. In addi-
that it would commence on the penalties. not exhaustive and is intended tion, there are annexes covering
90th day after the date of the The Book to serve as a guideline to assist closely related matters. It is his
promulgation. In effect, the new In April 2021, two Zimba- companies in ranking the most considered view that the Guide
Companies Act came into oper- bwean lawyers, Nqobile Mun- important corporate governance book is an essential starting
ation in February 2020, and all zara and Theresa Muchinguri, obligations for the purpose of point for all those wishing to un-
of its provisions began to apply wrote a book titled “A Guide to developing a compliance pro- derstand the scope, terrain and
thereafter, save for the re-regis- the Companies & Other Business gramme. Other corporate gov- contours of the new Companies
tration of companies, that was Entities Act (Chapter 24:31) with ernance obligations are found in Act. Although the Guide is not a
to be done within 12 months Commentary, Checklist for Gen- the National Code on Corporate specialist legal textbook on com-
from February 2020, and sub- eral Counsel, and Annexes.” The Governance, and in the Zim- pany law; it is a “toolbox full of
sequently extended to February Guide seeks to provide the read- babwe Stock Exchange Listing legal tools” for use by both law-
2023. The COBE Act therefore er with a simpler understanding Rules, and can be referred to for yers and non-lawyers. The Com-
applies to corporates of all sizes, of all of the COBE Act’s 304 Sec- additional guidance. Obligations panies and Other Business
and attempts to strike a balance tions and 10 Schedules. It is bro- under the National Code on Cor- Entities Act (Chapter 24:31)The
between over- and under-regu- ken down into seven Chapters, porate Governance are largely new Companies Act introduces
lation, in a bid to encourage for- which align with the Chapters voluntary. This is with exception many new legal principles into
malisation of companies. in the COBE Act. A key feature of listed companies, where Sec- Zimbabwean law by borrowing
By repealing the old Com- of this Guide is that it provides tion 220 of the new Companies and codifying Common Law, and
panies Act, the new Companies Commentary on some provi- Act requires that the board of also borrowing from other juris-
Act ended seven decades of sions, so as to assist both legal every public company must es- dictions. Notably, the new Com-
its predecessor’s subsistence, and non-legal readers to gain tablish corporate governance panies Act combines all mat-
which stood the test of time insight and perspective of their guidelines that are consistent ters relating to companies and
as evidenced in the minimal meaning. In some instances, the with the National Code on Cor- other business entities namely,
amendments. The new Compa- Commentary is analytical in na- porate Governance. On the other the constitution, incorporation,
nies Act was a result of extensive ture, as it provides the opinion of hand, listing rules are compul- registration, management and
engagements between various the authors on the Section under sory for the companies listed on internal administration thereof.
sectors in the economy, facilitat- discussion. In other parts, the the Zimbabwe Stock Exchange. Not only that, it also provides a
ed by the World Bank as part of Commentary is technical in that Therefore, for the purposes of list of entities that can register
the Rapid Results Framework, it provides a legal analysis of the determining priority, the corpo- thereunder, and become subject
which was spearheaded by the Section, either in the context of rate governance obligations of to the Act, that is, businesses
Office of the President and Cab- the application of the Section, or the new Companies Act rank operated as partnerships, syndi-
inet in the “Ease of Doing Busi- in the context of how the Section higher, as they are mandatory. cates, joint ventures and certain
ness” reforms for Zimbabwe. operates in relation to other Zim- Foreword by Professor Love- associations that voluntarily reg-
The approach taken in drafting babwean Acts or in the context more MadhukuThe Foreword ister in terms of Section 278 of
the COBE Act was to begin by of the country’s legal framework to the Book is provided by Prof the COBE Act. This means these
perusing the old Companies for business operations. Another Lovemore Madhuku, a Profes- business entities or any unreg-
Act and the Private Business key feature of this Guide is the sor of Law and Deputy Dean of istered association of persons
Corporations Act, identifying Checklist for General Counsel in the Law Faulty at the Universi- can choose to bring themselves
provisions that were no longer Annexure A. This Checklist pro- ty of Zimbabwe. He states that under the provisions of the new
relevant or that were outdated, vides a list of all the provisions the authors Nqobile Munzara Companies Act.
and either supplementing these in the COBE Act that comprise and Theresa Muchinguri must Protection of minority
provisions, or deleting them al- corporate governance obliga- be congratulated for an apt rec- shareholdersThe COBE Act
together, or inserting completely tions of registered entities and ognition of the centrality of the provides for protection of mi-
new provisions. Those provi- sets out the Sections in terms new Companies Act to the very nority shareholders, by empow-
sions there were still applicable of which they must comply. As foundation of the corporate and ering them with the right to call
were retained, with the majority these provisions are derived business world. The company is for investigations into the affairs
of changes thereto being the from the new Companies Act, the most popular vehicle for car- of the company. The methods of
replacement of criminal liability they are all compulsory and are rying on business, particularly for investigation are more detailed
for any contravention, with civil applicable as relevant to compa- profit. Companies dominate the than in the old Companies Act,
nies and PBCs. The Checklist is
...continued to page 22
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