Abstract
This paper explores the various strategies that banks in Masvingo are using to lure new clients. It is argued in this paper that the hyper – inflationary environment prior to dollarization of the economy had led to a booming business for most banks engaging in illicit activities like money burning. However, adoption of the dollarization of the economy culminated into a partial decomposition and at worst death of some banks as they struggled to adjust to a new economic dispensation. Findings in this study highlight that banks are embroiled in a subtle scramble for clientele as they try to capitalize on the resuscitated client confidence in the banking sector. It emerged that banks have resorted to provision of lucrative loan deal, use of modern ICTs and engaging in various corporate social responsibility activities to improve their corporate image so as to lure new clients. This study was purely qualitative in nature and adopted a triangulation of data soliciting techniques that included unstructured interviews, Focus group discussions, secondary sources and key informant interviews.
Highlights
AND BACKGROUNDThis ethnographic study draws on the case of the banking sector in Zimbabwe and Masvingo to examine the scramble for clientele between these banks in light of the dollarization of the economy and the various strategies that these banks are using to lure new clients to their banks amid the rejuvenation of the banking sector
Needless to stress is the fact that after the dollarization of the economy the banking sector has degenerated into a battlefield of fierce contestations and struggles pitting several banks competing for clients
It was argued in the paper that banks faced a plethora of operating stress which included but not limited to the hyper inflationary environment and declining deposits due to people’s loss of confidence in the banking sector
Summary
This ethnographic study draws on the case of the banking sector in Zimbabwe and Masvingo to examine the scramble for clientele between these banks in light of the dollarization of the economy and the various strategies that these banks are using to lure new clients to their banks amid the rejuvenation of the banking sector. Gukurume (2010) argued that since the adoption of the multi – currency system in 2009, a number of companies and financial institutions have struggled to operate sustainably as well as being capital compliant Such a scenario catapulted into massive laying off of bank personnel in the country for instance according to Zimbabwe Banks and Allied Workers Union, as at 15 July 2010, banks that retrenched staff in the past year (2009) include Metropolitan (120 employees), People’s Own Savings Bank (160), Standard Chartered (98, through voluntary retrenchment) Barclays and FBC (200 on voluntary retrenchment), Renaissance (5) and Tetrad (16). To this end the advent of the Unity Government (GNU) in February 2009 meant that their first critical priority and port of call was addressing the acute economic and humanitarian catastrophe Against this background, Gukurume (2010) argued that the subsequent adoption of the multi – currency regime after the jettisoning of the Zimbabwean dollar helped in restoring price stability and forced stronger fiscal discipline in the country. Taking such contestations as its axis, this paper dwells on the challenges confronting the banking sector in attracting clients in a dollarized economy as well as the mechanisms put in place for such players to function and remain functional over time
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