Zimbabwe moves towards state-owned mortgage lender, appoints board

Zimbabwe moves towards state-owned mortgage lender, appoints board

HARARE, June 1 (The Source) – Government has appointed a board for the National Social Security Authority (NSSA)’s proposed social security building society in a move to strengthen the authority’s investment portfolio of the following the collapse of its merchant bank.

NSSA was recently granted a licence to operate the mortgage lender, which will be a successor to the failed Capital Bank whose operating licence was cancelled last June.

The appointment of the nine directors will pave way for the appointment of a new management team. The board will be led by chairman Gamaliel Mhofu Bwanya whose deputy will be Precious Sibiya.

Other members include David Mnangagwa; Jean Maguranyanga; Nimrod Chiminya; Tinotenda Kambasha; Sibusisiwe Bango; Josephine Ncube and James Matiza.

“We have met all the other requirements for the building society licence,” labour minister Prisca Mupfumira told a press briefing on Monday.

She said $50 million had been set aside for the setting up of the building society, adding that a new NSSA board, which will be announced in a fortnight, would allocate the funds to the financial institution.

NSSA is a significant shareholder in FBC Bank, but it’s dalliance with Capital Bank failed dismally when it was shut down last year.

The bank was deemed an unsafe and financially, which its existence characterised by undercapitalisation, persistent losses, chronic liquidity challenges and inordinately high levels of non-performing loans.

The bank was part of Patterson Timba’s Renaissance Holdings, which collapsed in 2011 in a cloud of poor corporate governance allegations.

NSSA, a statutory pension scheme set up in 1989 to which all employees make contributions, took a controlling 84 percent stake in the bank in 2012 after converting its $8, 5 million deposit into equity and rebranded it.

  • Muthi ka Manyeula

    NSSA Building Society is an interesting initiative with potential to be a real game changer in housing development and home ownership among the most needy in our society. However, the key to success will be corporate governance to the best international standards, steeped in accountable and transparent lending practices. If this becomes embedded in the core culture of the new mortgage lender, there will be reasonable assurance that public funds are creatively and properly disbursed, instead of becoming another feeding trough for ‘free meal guys’ who have wreaked incalculable havov to Zimbabwe’s once viable financial services architecture.

    First priority is for RBZ to carry out a robust due diligence on all Board members who have been announced. There are appears to be some names who cannot be trusted with 5 cents as they seem to have engaged in highly questionable practices either as Board members elsewhere in the past or in private business. Anyone who does not pass stringent standards for invoovement in a bank ought to be disqualified and removed forthwith in the interests of ordinary working Zimbabweans who own NSSA funds. These are not Government funds by any stretch of imagination.

    NSSA Building Society cannot be in the business of making questionable and unsustainable credit decisions which add to the Kilimanjaro Mountain of existing non-performing bank loans created by delinquent bankers and bank directors.

    It is instructive that there are hardly seasoned, sqeaky-clean bankers and financiers on the list of announced Board members. This is a gravely false start fraught with potential fatal flaws.This is a huge red flag to the beneficial owners of NSSA funds. Corrective action is required immediately if the observation is correct.

    And when a strategic financial institution makes a seriously defective start with defective Board appointments, the likelihood of the appointment is management of the same ilk becomes a virtual certainty. Minister Mupfumira and Cabinet run the risk of being dammed by the public for potentially imperilling their hard-earned assets through questionable Board and management appointment, and setting the institution for certain disastrous failure.

    This economy has already had too many costly but avoidable abject and man-engineered failures. Let this institution not be another for Christ’s sake!