The Sunday News
Dumisani Nsingo Business Reporter
THE National Social Security Authority (NSSA) will soon set up a micro-finance institution which will focus on offering mortgage to civil servants, a month after another banking venture it was involved in — Capital Bank — was closed down by the central bank.However, Public Service, Labour and Social Welfare Minister Nicholas Goche said NSSA had already set aside $50 million for the setting up of a micro-finance institution following the successful liquidation of Capital Bank.
NSSA was the largest shareholder in the failed bank holding 87 percent with the remainder held by Renaissance Financial Holdings.
Capital Bank’s licence was cancelled by the Reserve Bank of Zimbabwe (RBZ) last month after NSSA indicated that it would not recapitalise the struggling institution.
The RBZ noted that the bank was undercapitalised and in the absence of capital injection, the financial condition of the banking institution dictated the banking institution be wound up.
The central bank also noted that Capital Bank had been operating in an unsafe and unsound financial condition characterised by critical under capitalisation, persistent losses, chronic liquidity challenges and inordinately high levels of non-performing loans.
“NSSA invested in Capital Bank because it was asked by the then Minister of Finance (Tendai Biti) to do that. In fact, they (NSSA executives) were told that it was a Cabinet decision of which it was not true and you know what has happened to Capital Bank — it has been liquidated . . .
“When I took over (as the Minister of Public Service, Labour and Social Welfare), I said there is no way we can continue to put money in this bottomless pit and therefore let us liquidate it and against all opposition we have succeeded in liquidating it,” Minister Goche said.
He said NSSA had already put in place plans to play a part in the financial sector through starting a micro-finance bank.
“We are setting up a new micro-finance bank that will focus only on housing for the civil servants and the general public. This will be for low-cost housing focusing mostly on civil servants.”
Minister Goche said the Ministry was in the process of putting together a substantive board for NSSA following the end of term for the previous board members.
NSSA is being overseen by an interim board with Public Service, Labour and Social Welfare permanent secretary Mr Ngoni Masoka as the interim chairperson.
“He (Mr Masoka) is the interim chairman of the board until we have completed the consultations on the appointment of a new board. We have to receive nominations from labour, business and from Government and it’s these nominations that will have to go through the process of vetting.
“We want people who want to get on the NSSA board because they intend to contribute meaningfully to the growth of that institution so the process of looking at people’s background is very important and that’s what we are doing at the moment,” Minister Goche said.
