AfDB calls on Zimbabwean banks to lend more to productive sectors of the economy

Apr 29, 2013

The loan-to-deposit ratio for Zimbabwean banks increased to 93.4 percent in January this year, from 91.6 percent in December 2012, a new report by the African Development Bank (AfDB) reveals.

The loan-to-deposit ratio for Zimbabwean banks increased to 93.4 percent in January this year, from 91.6 percent in December 2012, a new report by the African Development Bank (AfDB) reveals.

"At this high level some banks could be exposed to high repayment default rates if these loans are not used productively," the
report
states, adding that there is therefore a need for policy measures that expand the deposit base to levels that can be adequately supported by higher levels of lending.

According to the AfDB, this loan to deposit ratio increased because of higher demand for funding by households and industries.

"There is still further need to encourage more lending to the productive sectors of the economy for the economy to grow," adds the report.

An estimated 70 percent of the population does not have access to banking services, according to figures from African Economic Outlook website. To enhance inclusive banking, banks have introduced mobile banking products in conjunction with mobile phone service providers.ADNFCR-2976-ID-801578198-ADNFCR