Doug Munatsi, chief executive of BancABC, a commercial bank with limited microfinance activity, has postponed the extension of microfinance operations from Zambia to Zimbabwe citing the level of government salaries there [1]. Government workers in Zimbabwe earn between USD 122 and USD 206 per month and have been striking for a 400 percent wage increase since February 2010 [2].
Despite such unrest, Mr. Munatsi still claims that Zimbabwe is an area for strong microfinance growth in 2010 as a result of economic restructuring. The national economy has markedly improved following the 2009 termination of the Zimbabwe dollar, a currency plagued by chronic hyperinflation, and the legalized use of foreign currencies such as the US dollar, Botswana pula and South African rand [3]. As a result, BancABC’s existing non-microfinance operation in Zimbabwe experienced its first gain in ten years [1].
Mr. Munatsi states that “legislative activism” has ruled out the expansion of microfinance operations to other nations BancABC operates in, such as Botswana, Tanzania and Mozambique. These countries began regulating microfinance institutions following similar regional regulation efforts, such as the National Credit Act (NCA) of 2007 in South Africa [4] and the Namibia Financial Institutions Supervisory Authority Act (NAMFISA) of 2001 [5] in Namibia [6]. These legislative packages extended financial oversight to non-banking financial institutions.
About BancABC (African Banking Corporation Holdings Ltd.)
BancABC is a Botswana-based bank, formed through the 1997 merger of First Merchant Bank and Heritage Investment Bank [7]. It operates in five other southern African countries and has a total loan portfolio of USD 320 million as of June 2009 [3]. In the microfinance sphere, BancABC has 40,000 micro-borrowers in Zambia in addition to its existing commercial loans [1]. The corporation does not report to the MIX Market, the microfinance information clearinghouse.
Additional Resources:
[1] The Business Diary: “ABC mulls micro-finance for Zimbabwe” by Andrew Maramwidze, April 7, 2010, http://www.thebusinessdiary.co.bw/?p=743
[2] Reuters: “Zimbabwe government workers strike for higher pay” by Nelson Banya, Febraury 5, 2010, http://www.alertnet.org/thenews/newsdesk/LDE61419N.htm
[3] “ABC Holdings Limited Unaudited Interim Group Results for the Six Months Ended 30 June 2009.”, ABC Holdings Limited: June 2009, http://www.africanbankingcorp.com/abc/action/media/downloadFile?media_fileid=339
[4] “National Credit Act.”, ABSA Bank: April 2010, http://www.absa.co.za/absacoza/generated/files/6cc3e3d8bf5f2110VgnVCM1000003511060aRCRD/National%20Credit%20Act.pdf10
[5] “Welcome to NAMFISA.”, Namibian Financial Institutions Supervisory Authority: April 2010, http://www.namfisa.com.na/
[6] AllAfrica.com: “New NBFIRA Boss Takes Up Office” by Wanetsha Mosinyi, October 31, 2008, http://allafrica.com/stories/200811040814.html
[7] BancABC: “Group History.” http://www.africanbankingcorp.com/abc/view/abc/en/page54
MicroCapital’s Microfinance Universe profile: BancABC: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=bancabc
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