25 July 2014

Zimbabwe: Zim's Savings Deposits Up 12,5 Percent

ZIMBABWE'S savings deposits registered a 12,5% annual growth in May, inspiring an overall increase in money supply, latest Reserve Bank of Zimbabwe (RBZ) figures show.

The growth in money supply continues to be driven by tobacco sales which totaled a cumulative US$558,22 million at the end of May, according to the RBZ May 2014 monthly economic review.

Finance minister Patrick Chinamasa this week told Parliament's budget and finance portfolio committee that despite negative publicity and perceptions since the July 2013 general elections, the country's money supply has been relatively steady with signs of growth recently.

"The deposit level has remained constant for a very long time and recently increased to US$4,7 billion," he said.

The central bank said expansions were registered in all deposit classes with savings deposits recording the highest annual growth of 12,5%.

The report said annual growth in broad money supply increased to 7,66% in May 2014, from 6,65% in April. Broad money supply stood at US$4,018 billion in May 2013 compared to US$4,325 billion in May 2014.

On a month-on-month basis, broad money registered an increase of 2,25% between April and May 2014.

According to Tobacco Industry and Marketing Board figures, the country's tobacco production last week surpassed the 210 million kg mark for the first time in 14 years raking in more than US$668 million driven by small-scale farmers.This was after a more than 30% growth in deliveries compared to the same period in the prior year of 159 852 776kg valued at US$590 116 320.

Zimbabwe last surpassed 210 million kg production of the golden leaf in 2000 when it reached 227 million kg.

Deposits held by banks largely emanated from utilities and local authorities (25,78%); households and individuals (14,60%); financial organisations (20,08%) and distribution (8,93%).

Claims on the private sector, declined marginally from US$3,595 billion in May 2013 to US$3,591 billion in May 2014.

On a month-on-month basis, credit to the private sector also fell by 0,1% in May 2014, from US$3,594 billion recorded in April 2014.

"The slowdown reflects constrained lending by banks on the back of attendant liquidity challenges, as well as risk aversion occasioned by increasing non performing loans," said the RBZ.

Outstanding loans and advances were largely in respect of agriculture (19, 90%), house-holds (18, 66%), distribution (17, 77%), services (16,46%), manufacturing (14,44%), mining (6,72%) and construction (1, 51%).

"Credit to private sector continues to be short term in nature and mainly utilized for recurrent expenditures, 43, 92%; inventory and stocks build up, 34, 42%; consumer durables, 12, 06%; and capital expenditures, 6, 15%."

In terms of national payment systems, RBZ said the value of transactions processed through the real time gross settlement (RTGS) platfotrm in May 2014 decreased by 7% to US$3,2 billion from US$3,4 billion in April 2014, while the volume of transactions registered an increase of 9%, from 183 626 to 200 146 in the same period.

The total value of card based transactions on the other hand increased by 5, 2% to US$399,11 million in May 2014, from US$379,42 million in April 2014.

The value of mobile and internet based transactions also increased by 19%, from US$360,67 million in April 2014 to US$429, 27 million in May 2014 as mobile networks push innovations to drive their products.

Last week, Telecel Zimbabwe (Telecel) unveiled a debit card for its Telecash mobile money subscribers to be known as Telecash gold card.

The innovation is expected to dominate and change the face of mobile money on the retail sector.

At the launch, Telecel mobile financial services director Nkosinathi Dube said the gold coloured debit card was developed to, among other things, address retailers' complains about long queues caused by customers who use their mobile phones for mobile money transactions on tills.

He said the card can be used to pay for groceries, DSTV subscriptions, restaurant and hotel bills, and many other goods and services. It can also be used to withdraw cash at ZimSwitch branded automated teller machines.

This came a few weeks after Econet launched its EcoCash diaspora, which enables EcoCash subscribers to receive money from friends and relatives who are outside the country through internet and mobile platforms.

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