MICROCAPITAL BRIEF: Reserve Bank of Zimbabwe Gives Microfinance Institutions (MFIs) 6 Years to Plan for Higher Capitalization Requirements

The Reserve Bank of Zimbabwe (RBZ), the country’s central bank, has issued new capitalization requirements for money-lending bodies that will become effective in December 2020, increasing the minimum capital required to USD 10 million for deposit-taking microfinance institutions (MFIs) and USD 50,000 for credit-only MFIs. Until then, RBZ mandates deposit-taking and credit-only MFIs to maintain current minimum capital requirements of USD 5 million and USD 20,000, respectively. Capital requirements are intended to prevent financial institutions from becoming overleveraged and insolvent.

The Reserve Bank of Zimbabwe (RBZ) was founded in 1956 and 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.

By Meraj Husain, Research Associate

About Reserve Bank of Zimbabwe (RBZ)

The Reserve Bank of Zimbabwe 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.

Sources and Additional Resources

[1] Chronicle: “Microfinance institutions urged to comply with laws,” http://www.chronicle.co.zw/microfinance-institutions-urged-to-comply-with-laws/

[2] Reserve Bank of Zimbabwe: “Circular to Moneylending and Microfinance Institutions No. 04-2014/BSD: Minimum Capital Requirements for Microfinance Institutions,” http://www.rbz.co.zw/pdfs/2014%20Press%20Statements/Circulars%20to%20MFIs%20on%20Capital%2019.02.2014.pdf

MicroCapital, January 28, 2014, “Central Bank of Zimbabwe Imposes 5% Tax on Mobile Money Services,” https://www.microcapital.org/microcapital-brief-central-bank-of-zimbabwe-imposes-5-tax-on-mobile-money-services/

MicroCapital, September 25, 2013, “Bank of Ghana Increases Liquidity Requiremnt for Microfinance Financial Institutions,” https://www.microcapital.org/microcapital-brief-bank-of-ghana-increases-liquidity-requirement-for-microfinance-financial-institutions/

MicroCapital, December 21, 2012, “Government Hopes Zimbabwe Microfinance Wholesale Facility Can Lower Microfinance Institution Interest Rates that Reportedly Hit 40% Monthly,” https://www.microcapital.org/microcapital-brief-government-hopes-zimbabwe-microfinance-wholesale-facility-can-lower-microfinance-institution-interest-rates-that-reportedly-hit-40-monthly/

MicroCapital Universe Profile: Reserve Bank of Zimbabwe (RBZ) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Reserve+Bank+of+Zimbabwe

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