Moffat Mungazi
Lovemore Kadzura
Post Reporter
THE Deposit Protection Cooperation of Zimbabwe has encouraged people to use formal banking channels to safeguard their cash and investments, and shun dealing with unregistered deposit taking schemes.
DPC has launched a nationwide campaign urging people to bank their money to promote financial inclusion, growth of the financial sector and ultimately the national economy.
Of late, there has been mushrooming of pyramid schemes in the country where people end up losing substantial investments following their collapse.
People also form ‘savings groups’ popularly known as mikando and contribute cash which is mainly kept at a member’s house.
Members borrow from the fund at an agreed percentage, and some of the groups have cash running into thousands of dollars.
This according to the Deposit Protection Cooperation chief executive officer, Mr Hopewell Zinyau, is a risky undertaking as depositors in such schemes have no fall back plans in the event of the collapsing of the pyramid schemes or mikando groups.
“As Deposit Protection Cooperation of Zimbabwe, we are in the business of protecting depositors’ money through a fund we run.
“Depositors’ funds are protected in the event of a bank failure. DPC is on standby to compensate depositors in a failed bank of up to a cover level of US$1 000.
“For those banking their money with deposit taking micro-finance, we cover up to US$500 or its local currency equivalent. As a cooperation, we encourage people to bank through the normal channels for the sole reason that their deposits are protected through the Deposit Protection Fund.
“We encourage people not to use other channels like unregistered micro finance institutions such as ‘mikando’ and other pyramids schemes where at the end of the day if that pyramid collapses there is no one to provide cover,” said Mr Chinyau in sideline interview at a breakfast meeting with bankers, special interest groups and the media held in Mutare recently.
Mr Godfrey Dzveda of Tariro Foundation Zimbabwe, an organisation that works with persons with disabilities, said financial matters must involve every citizen despite social standing, and said his constituency can contribute to economic development.
“This is a welcome awareness on the advantages of having our deposits with registered financial institutions where there is guaranteed safety of our deposits and compensation whenever there is a bank failure.
The deliberations were quite interesting and insightful on the social inclusion aspect being done by the cooperation where they are doing awareness to vulnerable groups including persons with disabilities.
“We can also contribute meaningfully to the economic growth of the country. We are glad that we have managed to share our submissions for consideration where we requested for capacity building for our members in terms of income generating projects and financial awareness so that they can be equal players in terms of economic contribution,” said Mr Dzveda.
