czi president.jpgThe country’s banking sector deposits have increased by 42 percent last year but failed to sustain industry and household requirements as they are of short term nature.

Official data from the central bank shows that although the total deposits held by banks increased to 3.2 billion dollars last year from 958 million dollars in 2010, the situation could not solve financial problems affecting the economy.

The information shows that short term deposits which accounted for 84 percent of the total volume of savings for 2011 are a reflection that banks were mainly being used for the processing and accessing of salaries by depositors.

Confederation of Zimbabwe Industries president, Dr Joseph Kanyekanye, said the short term deposits have failed to boost financial inflows and assist the country’s private sector.

According to the central bank, most deposits from the financial sector balances are short term and cannot be used to fund long term working capital requirements.

This has resulted in several banks shifting focus to consumer lending at the expense of key productive sectors.

Stakeholders in the financial sector are therefore calling on the Ministry of Finance and the Reserve Bank of Zimbabwe to consider productive lending instruments that will allow banks to lend for long term period.