A report by the Financial Gazette just published says Afrasia Bank, formerly Kingdom Bank, was today placed under liquidation by the Reserve Bank of Zimbabwe after its shareholders surrendered their banking license. The parent company, Afrasia Bank Limited of Mauritius cannot commit any more money to the Zimbabwean operation and would rather just pull out.
We last wrote about AfrAsia bank in August last year when they the shut down their mobile money service, Cellcard. The bank was already in liquidity problems that had started a long while ago. Those problems just got worse, and today, after a series of meetings with the Reserve Bank, the bank threw in the towel.
The closure of the bank means more jobless Zimbabweans. The country is already has so high an unemployment rate, university graduates are said to be taking up menial jobs to make a living.
Kingdom Bank is not the only one to close in recent years. Another bank, Allied Bank, closed just last month. Just a little over a year ago, Trust Bank had its licence cancelled over abuse of depositor funds, and in June last year Capital Bank lost its license. We have an extremely ill economy, people.
Kingdom Bank, in its prime, was the epitome of a clean indigenisation dream. Building and not merely and not transferring wealth, and building it clean. Nigel Chanakira, it’s founder, an inspiration to many young entrepreneurial minds. But something happened on the way to heaven. Most of what we know at least started around the Spiritage/Valley Technologies situation.
Zimbabwe was Afriasia Mauritius’s only banking operation outside Mauritius with the other subsidiaries in South Africa and the UK only serving as representative offices.
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6 comments
Afrasia Bank Zimbabwe Ltd closed. I still hold on to substantial shares, some issued at the split from the Meikles marriage, and some from the rights issue undertaken by the bank. I am sure there are many Zimbabweans in my situation. An epitome of indigenisation you say, what then will be the epitome of white-collar crime?
The albatross around Zimbabwe’s neck will never be shaken off with the current crop of captains of industry, never. The minister of finance said it all at one of his lone voice addresses when he alluded to the failure by industry to think outside the box. Your comment wales about jobs lost within the Afrasia family, but I say there are many more casualties:-
1.Remember this bank was largely a middle-income earners bank. Many of them have lost life savings. It will destabilise their marriages and families, and the losses are immeasurable!
2.Many small companies that have been responding to the call to utilise banking services have learnt the hard way that the banking industry in Zimbabwe is the most dangerous industry to go near in recent years.
3.Many borrowers will have night mares to access their property title deeds if at all they want to look elsewhere for securitised business funding.
4.The investment Climate in Zimbabwe has been adversely affected, obliterating the recent visits by potential investors from Europe and / or the UK.
What could have been done?
More careful handling of the Asian country’s investment was required. Due diligence of banking institutions are better certified by the RBZ before committing money. The level and depth of NPLs including the one that has been widely publicised to have destabilised the bank, could have been determined before committing money. Save for the recent past monetary policy statement, prior policies would allude to the health and soundness of the sector, with the public not remembering to question how sound when a bank falls shortly thereafter.
The ZIA has a mammoth task to convince any potential investor, particularly from Mauritius and its neighbours, that Zimbabwe is a ripe investment destination. You could guess why. More detailed opinion on my blog.
thanks for the comment Yes we have lost our savings and our families will suffer .Is there any hope for depositors
what will happen to those individuals who owe the bank some money?
what will happen to those individuals who owe the bank some money?please tell me what happens is it a gain
Nigel Chanakira is, and has always been, a crook. If this man is the epitome of “inspiration” for indigenisation and entrepreneurialism, then it is no surprise that this country is in this sorry state.
My condolences to the families who have lost so much.
but the bank was owned by afrasia not nigel