No bank at risk of collapse in Zimbabwe

The Bankers Association of Zimbabwe (BAZ) has sought to calm rising public concerns over potential bank collapses, asserting that the country's banking sector remains "safe and sound" and insulated from financial turbulence affecting some regional economies.

BAZ president Sibongile Moyo highlighted that Zimbabwean banks are significantly healthier than their regional counterparts, many of which have faced double-digit non-performing loan (NPL) ratios and required central bank bailouts. "No banks are currently at risk of collapse. The sector remains safe and sound, reflecting robust resilience," Moyo said. She noted that the Reserve Bank of Zimbabwe's 2025 Mid-Term Monetary Policy Statement confirmed all banking institutions are adequately capitalised, with the average NPL ratio at 2.9% as of June 2025, well below the 5% international benchmark.

This strong performance contrasts with developments in neighbouring countries such as Zambia and Mozambique, where some banks have reported NPLs above 10%. Moyo attributed Zimbabwe's stability to an improving macroeconomic environment, marked by low inflation and a steadier exchange rate. Monthly ZiG inflation averaged just 0.5% from February to September 2025, while the exchange rate has remained relatively stable, gradually supporting a more conducive environment for sustainable banking operations.

The sector has also seen growth in lending, with total loans reaching ZiG67 billion (US$2.5 billion) by mid-2025, underpinned by the RBZ's gradual monetary tightening. Regulatory oversight and depositor protection have further bolstered confidence, with the Deposit Protection Corporation guaranteeing up to US$1,000 per account, periodically reviewed to ensure adequate coverage. "The banking system is fundamentally sound and stable, underpinned by a comprehensive legal and regulatory framework," Moyo stated.

Despite this reassurance, economists have urged vigilance over the rapid expansion of bank lending. Gift Mugano noted that while most loans—approximately 75%—support productive investment, the high cost of credit could pose repayment challenges for some businesses. Development economist Chenayimoyo Mutambasere added that the ZiG's devaluation has also increased demand for credit, as businesses and households seek to mitigate rising costs.

The credit growth comes as the government continues efforts to stimulate an economy that has struggled for over two decades, with the banking sector emerging as a rare source of resilience and reform. BAZ's statements aim to reinforce public confidence in a system that, according to regulators, remains robust, well-capitalised, and closely monitored.