Zimbabwe Banks Said to Stop New Loans on Policy Concern
Most Zimbabwean banks stopped making new loans because of concern over the policies President Robert Mugabe will pursue after he won an election described by his main rival as a “sham,” the chief executive officers of two lenders said.
The banks are concerned that Mugabe, who last month described the lenders as “shylocks” and said they should stop “robbing” Zimbabweans, may press ahead with plans to force foreign-owned lenders to cede 51 percent stakes to black Zimbabweans or the government, the CEOs said, declining to be identified because they don’t want to offend the government.
“Individual banks made decisions that they would not lend during this time, elections,” Sij Biyam, CEO of the Bankers Association of Zimbabwe, said in an interview today from the capital, Harare. The decisions may also be due to funding issues unrelated to the elections, he said, declining to be more specific.
The CEO of a third bank. who declined to be identified, said the institution had stopped lending several weeks ago because it couldn’t secure funding because of concern about the election.
Mugabe, 89, won 61 percent of the presidential vote in results released by the Zimbabwe Electoral Commission on Aug. 3, while his Zimbabwe African National Union-Patriotic Front won a two-thirds majority in parliament, defeating the Movement for Democratic Change, which said thousands of its supporters were excluded from the voters’ roll. A four-year coalition between Zanu-PF and the MDC had pulled the country out of a decade-long recession, with Zimbabwe posting four consecutive years of growth.
Banks operating in Zimbabwe include units of Standard Chartered Plc (STAN), Barclays Plc (BARC) and Standard Bank Group. CBZ Holdings Ltd. also operates in the country. The Bankers Association of Zimbabwe has 23 affiliated institutions.
The Reserve Bank of Zimbabwe declined to comment immediately when called.
The week before the elections also saw unusually high withdrawals from banks, the CEOs said.
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