THE National Social Security Authority (NSSA) has applied for approval to start a microfinance bank barely a month after it surrendered the operating licence of a banking subsidiary.
The application was handed to the Reserve Bank of Zimbabwe early this month, NSSA general manager James Matiza said on Friday.
"We have made an application. There are a number of requirements that they [RBZ] want us to put in place such as the number of prospective board members and company secretary," Matiza told Standardbusiness.
Matiza said the proposed name for the institution will be Social Security Microfinance Bank.
Early this month, NSSA surrendered the operating licence of its 84% owned subsidiary, Capital Bank, on the grounds that the authority was no longer willing to inject additional capital into the institution.
RBZ said Capital Bank had been operating in an unsafe and unsound financial condition characterised by critical under-capitalisation, persistent losses, chronic liquidity challenges and inordinately high levels of non- performing loans.
It said appropriate public notices shall be issued in due course concerning payments to depositors and other creditors.
The move to surrender the licence comes after the realisation that Capital Bank needed huge capital outlay and had failed to turn around since NSSA moved in.
RMB was placed under curatorship in 2011 after an investigation by the central bank unearthed the abuse of depositors' fund by founding shareholders.
NSSA moved into the then RMB in 2012 in a US$24 million deal for 84% shareholding.
NSSA said at the time it was swooping in on RMB as a gateway to First Mutual Holdings Limited (formerly Afre Corporation). RMB had 33% shareholding in Afre.
Despite the rebranding exercise, Capital Bank had failed to gain market acceptance from its predecessor, ReNaissance Merchant Bank (RMB) that had slipped into curatorship.
The two shareholders NSSA on one hand and Patterson Timba and his partners on the other, were not on talking terms.
Timba and his partners own the remaining 16%.
The winding down of Capital Bank is in line with board resolution of the previous NSSA board. The board, chaired by Innocent Chagonda, recommended the closure of Capital Bank and the opening up of a new microfinance bank.
The board's tenure ended in August last year and NSSA is currently operating without a board.
"What we have lost in Capital Bank, we have more than gained in Afre [now First Mutual Holdings]. Our intention was never in the bank, but Afre," a board member said last year.
First Mutual Holdings has interests in insurance, reinsurance and property investments, among others.
NSSA has interest in banks, insurance and properties. It has a 35,12% stake in FBC Holdings, the parent company of FBC Bank, 37,79% shareholding in ZB Financial Holdings that wholly owns ZB Bank and 10% in CBZ Holdings.
The authority also has a controlling shareholding in hospitality concern, Rainbow Tourism Group.