BANKING services should be provided free of charge in order to achieve financial inclusion and increase business for the sector, Steward Bank CEO Lance Mambondiani said yesterday. Officially launching an agent banking partnership with Total Zimbabwe in Bulawayo, Mambondiani said the habit of relying on service charges would not sustain the survival of banks going forward.
He acknowledged public confidence in banks was declining, despite positive profits posted by the sector last year. Some banks charge up to $10 or more in service charges per month excluding withdrawal costs per transaction.
“We believe banking should be free. We believe that banking isn’t something that people should pay for. The reason for that is that our understanding of what banking is and the understanding of our calling is perhaps different because for us, we know that people are actually not interested in banks, they’re interested in banking,” said Mambondiani.
He warned that banks risk total collapse unless they change their business model by responding positively to community needs. Mambondiani made reference to record companies and bookshops that are now extinct because of resistance to change.
“Banks actually think or we’ve thought we’re immune to destruction. We’re not. Banks think we can’t be destructed perhaps because we’re protected by the governor of the Reserve Bank or by regulation but we’re not,” he said.
“We do realise that 85 percent of people in this country don’t have bank accounts, according to RBZ statistics. The reason for that is that you, our customers, have voted with your feet. You’ve chosen to put your money on EcoCash or under the pillow.
“The reason for that is because you don’t trust banks because when you put $10 and you go back the following month it would be 50 cents because of what we call service fees.”
Mambondiani said Steward Bank, a subsidiary of leading telecommunication firm Econet Wireless, has adopted a model of following clients to their point of need using modern technology.
He said their model sought to ensure easy access to financial services to all. “Banking should be accessible to everybody, just like telecoms. Every Zimbabwean should have the capacity to do that without the encumbrance of bank charges or service fees,” he added.
Last year, the central bank had to intervene by capping interest on loans at 18 percent following a public outcry with some banks charging up to 40 percent interest. The trend has been blamed for the increase in bad loans as many debtors fail to pay forcing banks to attach properties.
The negative attitude towards banking has also been partly blamed for the financial crisis currently gripping the country, with experts saying more money was circulating outside the formal channels.
Under the partnership with Total Zimbabwe, Steward Bank customers can walk into any Total service station and access banking services including depositing money and withdrawals. The bank will, over the next two months, install point of sale card readers at all 150 Total service stations, allowing Zimbabweans to pay for fuel with plastic money.
Total managing director Christopher Okonmah, Bulawayo Mayor Martin Moyo and the business community attended the event.