The Reserve Bank of Zimbabwe (RBZ) has noted some corporate governance and risk management weaknesses at the Zimbabwe Women’s Microfinance Bank Limited following a routine inspection by the regulator.
The Zimbabwe Women’s Microfinance Bank was licensed in 2018 with the mandate to offer women with financial products at concessionary rates after the realization that most women were financially excluded.
In a statement released this afternoon, the RBZ raised concerns over the institutional inefficiencies noted during its on-going supervision activities in terms of Section 36 of the Microfinance Act (Chapter 24:30).
“The examination determined corporate governance and risk management weaknesses at the institution. As part of its supervisory processes, the Reserve Bank has engaged the institution’s board and shareholders who have since initiated processes and measures to address the deficiencies,” said RBZ.
“The main mandate of Zimbabwe Women’s Microfinance Bank Limited is to facilitate financial inclusion and economic empowerment of women. The Government of Zimbabwe as shareholder is committed to the resolution of the identified weaknesses to enable the microfinance bank to continue to perform its mandate.”
The Bank could not however divulge the key issued noted in the supervision exercise.
“Through its supervision processes, the Reserve Bank shall monitor progress on the resolution of the identified weaknesses,” said RBZ.
The Government poured US$ 10 million towards the bank capitalization at its inception in 2018. Last year it was allocated ZW$ 1 billion by Treasury as government continued to prop up efforts to improve women participation in the economy.
However, analysts are critical of the high interest rates of up to 200% introduced last year by the RBZ which have had an adverse effect on borrowing. The institution has also been criticized for its failure to offer flexible lending terms at a time most women do not possess collateral.
