(TALKZIMBABWE) Indigenisation board to probe foreign-owned banks

Sunday, November 14, 2010

(TALKZIMBABWE) Indigenisation board to probe foreign-owned banks

Indigenisation board to probe foreign-owned banks
By: TSM-TZG
Posted: Sunday, November 14, 2010 3:59 pm

Indigenisation board to probe foreign-owned banks | National Indigenisation and Economic Empowerment Board, NIEEB, foreign-owned banks, externalising proceeds, David Chapfika, indigenisation and economic empowerment act, saviour kasukuwere

THE National Indigenisation and Economic Empowerment Board (NIEEB) has launched a probe into the conduct of some financial institutions after it emerged that some foreign-owned banks are externalising proceeds generated from local business.

Some banks are lending a small percentage of their proceeds to locals while the bigger chunk of deposits is finding its way outside the country’s borders, according to a report published in the weekly newspaper, The Sunday Mail.

NIEEB has since launched investigations into the allegations, while a report would soon be presented to Government.

NIEEB chairperson Mr David Chapfika last week confirmed that sector committees that were put in place to advise Government on indigenisation issues noted that some foreign-owned banks were taking a backseat in the development of local projects.

Mr Chapfika said 30 percent of deposits were being issued as loans to local companies.

“What we want to understand is where the rest of the money is going.

“We noted that in the financial service sector we have more indigenous banks.

“But in terms of business, the foreign-owned banks are lending only 30 percent of their deposits. Where is the 70 percent going?

“It has been observed that money is being lent to other countries at the detriment of Zimbabwe,” said Mr Chapfika.

Mr Chapfika said NIEEB had gathered data from sector committees set up to look into the indigenisation of the economy.

The sector committees include financial services sector, arts and entertainment sector, mining, transport and motor industry, communications, education, sports and culture.

The sector committees were established to deal with issues such as the minimum net asset value threshold above which a business in the sector is required to comply with empowerment regulations.

The committees also look at policies to overcome barriers and challenges to indigenisation.

They also recommend sector-specific indigenisation and economic empowerment strategies for consideration by the NIEEB.

Mr Chapfika said there was agreement that the economy needed to be indigenised as soon as possible by following the maximum five-year stipulated timeframe.

“We have now received input from the 13 sector committees and subsector committees. We are now finalising the compilation of a composite report,” said Mr Chapfika.

Labels: DAVID CHAPFIKA, INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), SAVIOUR KASUKUWERE