NMB gets RBZ approval for agency banking

Published: 24 August 2017

Listed financial services provider NMB Holdings has received approval from the Reserve Bank of Zimbabwe for its banking subsidiary to introduce agency banking.

Chief executive Mr Ben Washaya told analysts yesterday that following the granting of the approval the bank's agency banking platforms would become operational before the end of this year.

"We received the necessary regulatory approval for agency banking roll out and we expect to have our agency banking functional during the fourth quarter of the year," he said.

The move is part of the bank's broader strategy to tap into the unbanked market. Last year, the bank launched the "no-frills" NMB-lite, a low-cost bank account aimed at the lower end market.

The soon-to-be introduced agency banking platforms, which will also entail a low-cost model, will help the bank extend its services to the new banking non-elite.

Mr Washaya said 75 percent of the bank's customers were currently transacting via its various electronic platforms. The central bank approved adoption of agent banking models as part of its drive to extend financial inclusion countrywide.

The 2012 FinScope MSME Survey and the 2014 FinScope Consumer Survey revealed that 23 percent of the country's adult population was financially excluded, and that only 30 percent of Zimbabwe's adult population made use of banking services as at 2014.

Additionally, only 14 percent of micro, small and medium enterprises owners were banked while only 1 percent of the adult population made use of capital market services. These statistics pointed to a need to drive financial inclusion in the country.

Meanwhile, NMB Holdings yesterday after-tax profit for the six-months to June 30, 2017 jumped 35 percent to $3,6 million from $2, 6 million in the prior comparable period .

The improved performance was notwithstanding an 8 percent drop in gross income.

The group's total income slipped to $23, 9 million from $26, 1 million in the first half of last year, attributable to weaker interest income on reduced lending.

However, reduced income for 2017 was negated by significantly reduced impairment losses on loans and advances, which stood at $878 304 from $3, 2 million in the first half of last year.

Operating expenses were down 4, 6 percent as a result of several cost reduction strategies implemented during the period under review.

NMB's non-performing loans (NPLs) ratio stood at 10, 7 percent down from 11, 1 percent last year. Mr Washaya said the group is aiming for a single digit NPL ratio by year end.
- bh24