LOCALLY-OWNED banks, struggling to survive a failing economy, have been forced to engage foreign investors at a time the government wants the country's financial services sector to comply with its indigenisation programme.
The development was revealed by Bankers Association of Zimbabwe (BAZ) president, George Guvamatanga, when he addressed the Parliamentary portfolio committee on Youth, Indigenisation and Economic Empowerment last week.
Indigenisation of the banking sector sparked public rows between former central bank governor, Gideon Gono, and the then trailblazing empowerment minister, Saviour Kasukuwere, in the last coalition government.
Gono said the sector needed to be handled with caution, warning a one-size-fits-all approach would not work while Kasukuwere insisted that "the law is the law".
Guvamatanga said since the introduction of the economic empowerment law under which black Zimbabweans should be majority owners of every business in the country, two local banks have changed their shareholding structures in favour of foreigners.
"Of the 21 Banks operating in Zimbabwe today, five are foreign-owned and 16 are locally-owned. After the Act we haven't seen any local players entering the sector while two or three foreign players have entered the market," Guvamatanga said.
Economic challenges bedevilling the country have seen Kingdom Bank being sold to foreigners, in a deal attributed by Guvamatanga to "high capitalisation requirements".
Another bank that now has a majority foreign owner is Premier Bank, now called Ecobank.
"The new capital requirement of US$100 million by 2020 is too much for most banks that are sitting on US$50 million, Zimbabweans are so enterprising and for now there is no US$100 million," he said.
Government is pushing for all foreign owned banks to cede shareholding to locals as a way to empower them, but Guvamatanga said while the thrust was noble, the timing of the new capital thresholds was acting as a restriction for most Zimbabweans.
He said the BAZ was advocating empowerment of locals through tenders and the creation of opportunities to provide services to banks as opposed to being given shares in the institutions.
The Barclays boss said banks would not declare dividends any time soon because of the need to meet the new minimum capital requirements which means women and youths handed shares under indigenisation would not immediately benefit from the deals.
He added: "Do you start by indigenisation or empowerment?
"When you talk of indigenisation of women and youth by giving them shares in a bank that is looking for capital, for them to benefit, there should be a dividend declared which might take place over a period of five.
"But I am saying why wait to put money in our people's pockets, we run canteens, branches across the country youth and women should provide those services.
"Banks cannot declare a dividend until they meet the $100 million capital requirement. Ownership without cash flow is not useful. What will the youths from Gutu in Chitsa benefit from just owning shares?
"We should use a quick-win strategy; the primary aim is to get money into people's pockets. Why do you want to do something that won't benefit our people?"