MICROCAPITAL BRIEF: National Social Security Authority (NSSA) of Zimbabwe Losing License for Capital Bank, Seeks to Establish Microfinance Institution (MFI)

The Reserve Bank of Zimbabwe (RBZ), the authority that supervises the financial sector and formulates monetary policy in Zimbabwe, reportedly has canceled the operating license of Capital Bank Corporation Limited (Capital Bank), a financial institution in Zimbabwe that offers corporate banking, wealth management, trade finance and financial advisory services, due to insufficient liquidity. As per the monetary policy statement of RBZ dated January 2014, the capital requirement for commercial banks in Zimbabwe is USD 25 million.

The majority shareholder of Capital Bank is the National Social Security Authority (NSSA), the manager of pension, workers’ compensation and other programs for the nation of Zimbabwe, which purchased an 84-percent stake in the bank for USD 24 million in 2012.

Despite the cancellation of Capital Bank’s operating license, NSSA reportedly is seeking regulatory approval to establish a new microfinance institution in Zimbabwe. Details of the plans for this organization are not available.

As of 2011, RBZ reported total assets of USD 687 million, and NSSA reported total assets of USD 592 million. As of June 30, 2012, Capital Bank reported total assets of USD 63.4 million, loans and advances of USD 26 million, total deposits of USD 7.5 million, return on assets of 7.1 percent and return on equity of 27.5 percent. More recent financials for the bank are not available.

By Alíz Crowley, Research Associate

About Reserve Bank of Zimbabwe (RBZ)

The Reserve Bank of Zimbabwe (RBZ) was founded in 1956 as the Bank of Rhodesia and Nyasaland. It is responsible for the formulation and implementation of monetary policy in Zimbabwe. It supervises the country’s financial sector, including commercial banks and other financial institutions. As of 2014, Dr Charity Dhliwayo is the acting governor of the institution. As of 2011, RBZ reported total assets of USD 687 million.

About National Social Security Authority (NSSA)

The National Social Security Authority (NSSA) is a government-owned social security provider in Zimbabwe. As of 2014, NSSA administers two schemes: the Pension and Other Benefits Scheme that was introduced in 1994 and is based on a 50/50 contribution from employers and employees; and the Accident Prevention and Workers’ Compensation Scheme that was established in 1990 and is a compulsory, employer-funded scheme. NSSA also manages the funds accumulated via these schemes and advises the government of Zimbabwe on social security matters. NSSA holds interests in real estate, banks, insurance companies and a hospitality concern. As of 2011, NSSA reported total assets of USD 592 million.

About Capital Bank Corporation Limited

The Zimbabwe-based Capital Bank Corporation Limited (Capital Bank), formerly known as ReNaissance Merchant Bank Limited, is a financial institution that offers corporate banking, wealth management, trade finance and financial advisory services. Capital Bank was established in 2002. The institution had two branches, one each in the cities of Harare and Bulawayo. Since 2012, the majority shareholder of the bank has been the National Social Security Authority of Zimbabwe, which holds 84 percent ownership in the institution as of 2014. As of June, 2014 the Reserve Bank of Zimbabwe announced the cancellation of Capital Bank’s banking license. As of June 30, 2012 Capital Bank reported total assets of USD 63.4 million, loans and advances of USD 26 million, total deposits of USD 7.5 million, return on assets of 7.1 percent and return on equity of 27.5 percent.

Sources and Additional Resources

[1] The Standard, NSSA to proceed with microfinance plans

[2] Capital Bank Website, Reviewed Press Release

[3] National Social Security Authority Website, About National Social Security Authority (NSSA)

[4] Reserve Bank of Zimbabwe, January 2014, Monetary Policy Statement 

MicroCapital, June 2, 2014, Cash Application Universal of Zimbabwe Launches Mobile Money Management Software

MicroCapital, March 9, 2014, Reserve Bank of Zimbabwe (RBZ) Limits Exclusive Agreements Between Telecommunications Providers, Mobile Money Agents

MicroCapital, March 3, 2014, Reserve Bank of Zimbabwe Gives Microfinance Institutions (MFIs) 6 Years to Plan for Higher Capitalization Requirements

MicroCapital Universe Profile: Reserve Bank of Zimbabwe (RBZ)

MicroCapital Universe Profile: National Social Security Authority (NSSA)

MicroCapital Universe Profile: Capital Bank Corporation Limited

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