Short-Term Money, Long-term Problem: How Zimbabwe’s Deposit Boom Is Not Fuelling Growth

Zimbabwe’s banking sector is quietly sitting on a paradox: deposits are rising, but the economy is not fully benefiting.

By Advent Shoko

On paper, the numbers look strong. CBZ Holdings crossed the US$1 billion deposit mark in 2025, while FBC Holdings posted a 32,1 percent jump to US$586,2 million. But beneath this growth lies a structural weakness, most of this money is short-term and highly mobile.

Demand deposits dominate, leaving banks with limited room to fund long-term projects like infrastructure, housing, and industrial expansion. The deeper issue, however, is behavioural.

Presenting the group’s results, CBZ chief executive Lawrence Nyazema said Zimbabwe’s economy still operates largely on quick withdrawals:

“Zimbabwe continued to operate largely as a cash-based economy, with significant withdrawals occurring shortly after salaries are credited, limiting the banking system’s ability to retain liquidity.”

This explains why rising deposits are not translating into productive lending.

Authorities are trying to shift the tide. According to the Bankers Association of Zimbabwe, new policy measures are targeting savings behaviour. Chief executive Fanuel Mutogo said:

“Under the current framework, minimum interest rates for 2026 are set at 5 percent for ZiG savings accounts and 2,5 percent for US dollar accounts, while time deposits attract 7,5 percent in ZiG and 4 percent in US dollars.”

He added:

“Maintaining positive real interest rates, returns above inflation, is intended to incentivise a shift from consumption-driven behaviour towards longer-term deposits.”

Still, confidence remains the missing link. Mutogo stressed:

“Consistent efforts to maintain exchange rate stability and low inflation are essential in building confidence and encouraging households to shift from immediate consumption to long-term financial planning.”

With an estimated US$5 billion circulating outside the banking system, the real story is not just about deposits, it is about trust. Until that gap is closed, Zimbabwe’s banks will remain liquid, but limited in driving long-term economic growth.