Banks On Notice As RBZ Targets The Lending Practices Affecting Thousands Of Zimbabweans
The Reserve Bank of Zimbabwe (RBZ) has targeted banks and microfinance institutions over abusive loan practices and debt traps, warning that lenders which push already struggling borrowers deeper into debt or use unfair debt recovery methods could face regulatory action. The warning comes as the central bank strengthens consumer protection measures across Zimbabwe’s financial sector.
RBZ Warns Banks Against Pushing Borrowers Into Debt Traps
Speaking at the inaugural Regulators Forum organised by the Consumer Protection Commission in Harare last week, RBZ Microfinance Division Registrar Simbarashe Mashonganyika said financial institutions have a duty to assess whether customers can realistically afford to repay loans before approving credit.
He said lenders should refuse applications where additional borrowing would leave customers in a worse financial position.
Introducing his remarks, Mashonganyika said:
“We require that before they give out a loan, they must make sure that the intended borrower is not going to be over-indebted and they must be able to refuse a loan application when, from their assessment, they know that their loan is not actually going to make the situation better.”
According to The Herald, which published the report on 14 July 2026, the RBZ considers over-indebtedness one of the biggest threats facing consumers, with some lenders continuing to approve loans despite clear signs that borrowers are already financially overwhelmed.
Mashonganyika said the central bank’s market conduct supervision framework, introduced in 2024, is intended to ensure banks and microfinance institutions treat customers fairly throughout the lending process.
RBZ Condemns ATM Card Seizures And Unfair Debt Recovery
Mashonganyika also condemned reports of unfair debt recovery practices within parts of the microfinance sector.
He said some loan collectors had allegedly taken borrowers’ ATM or debit cards or waited for customers on payday to recover outstanding loans immediately after salaries had been deposited.
He said:
“Sometimes we also have stories of institutions that were actually collecting the ATM card or the debit card of every borrower, waiting at the end of the month when the loan is now due; they are the first to go and take money from the ATM. Now we have seen that those issues can actually be reduced.”
He added that such practices have no place in a properly regulated financial system. Financial institutions are expected to disclose interest rates, fees, repayment schedules and all loan terms before agreements are signed. They should also communicate this information in languages customers understand, including local languages where appropriate.
Mashonganyika further urged lenders to protect customers’ personal information and establish effective complaints handling systems.
He said:
“Where customers remain dissatisfied after exhausting internal processes, they can escalate their complaints to the RBZ’s consumer complaints unit for investigation and resolution.”
Banking Sector Remains Profitable As Consumer Protection Tightens
Meanwhile, RBZ Governor John Mushayavanhu said in the 2026 Monetary Policy Statement that Zimbabwe’s banking sector remained profitable despite lower earnings.
The sector recorded aggregate profits of US$337.65 million (approximately R6.08 billion) for the year ended 31 December 2025, down from US$1.03 billion (approximately R18.54 billion) recorded during the corresponding period in 2024, while the quality of earnings improved following greater local currency stability.
The microfinance industry also expanded its footprint during 2025, increasing its branch and agent network from 3,046 to 4,078 as institutions sought to improve access to financial services.
The RBZ’s latest warning signals increased oversight of lending practices as regulators seek to strengthen consumer protection while promoting responsible lending across Zimbabwe’s financial sector.
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