IDBZ in US$1.2 million loan scandal - Zimbabwe Situation

IDBZ in US$1.2 million loan scandal

via IDBZ in US$1.2 million loan scandal | The Financial Gazette – Zimbabwe News by Maggie Mzumara 11 Mar 2014

AT a time when the Infrastructure Development Bank of Zimbabwe (IDBZ) has been haggling with non-managerial staff over a housing support facility that started in 2008, the institution has generously issued out loans totalling US$1,2 million to top management. TheFinancial Gazette heard this week that IDBZ extended a housing loan of US$320,000 to the director of corporate services and human resources, Francesca Zinyemba, while a total of US$880,000 was awarded to 22 top managers at US$40,000 each for car loans, causing disgruntlement among the general workforce.

Documents in our possession show an Real Time Gross Settlement transaction of the said amount went into Zinyemba’s Barclays Bank account on November 2, 2012 in schedule number ZDBLS 12044A00012. The Zimbabwe Banks and Allied Workers Union (ZIBAWU) said it was outrageous for IDBZ to pamper its top management when the institution was digging its heels in over a housing facility for general employees.

“What kind of a board presides over a matter like that and awards such an obscene loan of US$320 000 to one person when the bank is struggling and management is failing to expeditiously honour an agreement of US$7,500 loans to non-management staff,” said ZIBAWU assistant general secretary, Shepherd Ngandu.

It is understood that while the IDBZ had made an undertaking to extend building assistance of an initial amount to US$7 500 for each employee to build houses of their choice, the bank then in midstream altered the arrangement. While the loan programme started in 2008, not all qualifying staff have received their loan. Efforts by staff to engage management on the issue through ZIBAWU yielded no result as letters to management went unanswered.

“It is also alleged that most of them (who got the loans) have not even paid a single instalment towards these loans three months after getting them,” ZIBAWU said in a letter to Charles Chikaura, IDBZ’s chief executive officer.

The IDBZ insisted to the Financial Gazette that all was above board, saying the bank provides loan facilities to staff as part of their normal conditions of service. “Like all other financial institutions which offer such benefits to staff, the loans are provided subject to availability of funding and the individual staff member earning capacity to avoid financial distress.

“All staff in the bank are entitled to loan facilities as a benefit depending on availability of funding and one’s earning capacity to minimise incidences of distressed borrowing among staff. With respect to management on fixed term contracts, the type of loan facility and entitlement thresholds are approved by the board and stipulated in their individual employment contracts. Executive management who have to date accessed any loans from the bank have done so in compliance with the provisions of their employment contracts,” IDBZ wrote in response to this paper’s questions last week. With respect to car loans given to managers, IDBZ said the bank changed from a company car benefit scheme to a car loan scheme in 2011.

“Managers were given different loan amounts depending on their income.  The change in the benefit scheme was done as a cost saving measure and is in line with market practice in the financial services sector.  As a result of this change, the bank has realised significant savings on its motor vehicle maintenance budget despite a five percent allowance given to the managers to offset loss of benefit, which again is consistent with market practice,” IDBZ wrote.

Although IDBZ is one of very few parastatals which recorded a profit last year, the bank is saddled by a US$38 million legacy debt. It has also been experiencing challenges in mobilising lines of credit as it remains under the sanctions list of the Office of Foreign Assets Control, an agency of the United States Department of Treasury.

These claims come against a background of pending salary disputes in the banking sector dating back to 2011. Current disputes emanate from collective bargaining arbitration which saw ZIBAWU deadlocking with Bankers Employers Association of Zimbabwe on percentages of salary increments. The banking sector has increments across the board industry, however, individual banks also negotiate separately with their employees.

Although some increments have been noted in the sector, the discrepancies between management and the least paid workers are still a major bone of contention and a festering cause of strained relations between management and staff. According to ZIBAWU, while the least paid worker in the sector gets a gross salary of US$575, management salaries range from US$15 000 to US$30 000. To add insult to injury are the hefty allowances and bonuses management bestow upon themselves.

“When staff ask for salary increments, management says times are bad, the banks are struggling and cite a lack of resources, but when it comes to themselves, they award themselves incredible increments,” said Ngandu. “If we are struggling then all of us should be seen to be struggling.”



  • comment-avatar
    John Thomas 4 years

    You work for a ZANU bank. Stop complaining

  • comment-avatar
    NBS 4 years


  • comment-avatar
    Katsi-yatota 4 years

    that must motivate the general stuff to work hard and become managers. managers are associated with big perks. i would not want my manager to live in Glen Nora, ala, he must live in Borrowadale, possibly near the Mugabes