http://www.zimonline.co.za/Article.aspx?ArticleId=257

HARARE - Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono yesterday cancelled licences of the country's 16 money transfer agencies while also announcing tough measures to force commercial banks to lend money to agriculture and other key sectors of the comatose economy.

The agencies whose licences were revoked are FREDEX, POSB, Stanchart, NMB Bank, TransAfrik, Dollarway, CABS, Stanbic, Zimpost, I and F, Pacific, Barnfords, Currency King (Kingdom), CBZ, Parlovan and Interfin.

In a memorandum to financial institutions Gono - tasked by President Robert Mugabe to revive Zimbabwe's shrinking economy - said withdrawal of licences was because of "non-performance and deviant behaviour" by most transfer agencies.

The RBZ chief, who two years ago forced several mostly locally-owned commercial banks to close saying they were mismanaged, said his latest move was meant to turn around an economy that has shrunk by more than a third over the past six years and has the world's highest inflation at 1 204.6 percent.

Gono said in the case where a transfer agent was linked to a bank, withdrawal of the transfer licence did not mean cancellation of that institution's bankers licence or authorised dealership.

The estimated three million Zimbabweans or a quarter of the country's 12 million people living and working abroad wishing to send money home would have to do it through banks said Gono, who had always accused
transfer agencies of channelling earnings from the Diaspora to the illegal but thriving black-market for foreign currency.

In a bid to force commercial banks to lend money to the mainstay agriculture sector and other key areas, Gono decreed that banks should with immediate effect lend 30 percent to the farming sector, 15 percent to mining, 10 percent to manufacturing, 10 percent to tourism and similar percentage to small and medium-scale enterprises.

Banks have been reluctant to lend especially to agriculture after the government destabilised the key sector through its chaotic and often violent farm seizure programme over the past six years.

The central bank chief also said all financial institutions had declared full compliance with new capital requirements set by the RBZ, as of 30 September 2006.

He however warned of a pending audit to ascertain the authenticity of declarations of compliance by the financial institutions.

Transfer agencies wishing to have licences reinstated would have up to the end of this month to appeal to the central bank.

"Such window of appeal remains open until 31 October 2006 but for the time being, the public are advised that those licences are no longer valid from the date of this announcement," Gono said.

Zimbabwe is grappling with an economic crisis described by the World Bank as the worst in the world outside a war zone. The meltdown, critics blame mainly on state mismanagement, has seen the country without food, fuel, electricity, essential medicines, hard cash and just about every basic survival commodity.

Mugabe, in power since Zimbabwe's 1980 independence from Britain, denies ruining what was once one of Africa's most vibrant economies and instead blames Western sanctions against his government and erratic rains for crippling the agriculture-based economy. - ZimOnline

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