CBZ Bank Limited PresentationCBZ Bank Limited Presentation

Presentation by D. Z. Mandivenga SMEs & Presentation by D. Z. Mandivenga SMEs & Microfinance Executive at The AFRACA Microfinance Executive at The AFRACA Southern Africa Sub Regional WorkshopSouthern Africa Sub Regional Workshop

INTRODUCTIONINTRODUCTION

Who is CBZ Bank LimitedWho is CBZ Bank Limited

Structures – DivisionsStructures – Divisions

Number of BranchesNumber of Branches

Vision and missionVision and mission

- Our commitment- Our commitment

- Our principles- Our principles

- Our driving force- Our driving force

OUR COMMITMENTOUR COMMITMENT

To be a progressive strong bank geared to serve To be a progressive strong bank geared to serve personal and corporate customers globally from our personal and corporate customers globally from our home base. To satisfy the diverse needs of our home base. To satisfy the diverse needs of our customers by offering a wide range of innovative customers by offering a wide range of innovative financial services solutions.financial services solutions.

OUR PRINCIPLESOUR PRINCIPLES

Governance Conscious-Dedicated to being ethical, Governance Conscious-Dedicated to being ethical, compliant and transparent in all our activities.compliant and transparent in all our activities.Customer Focus-Dedicated to satisfying customers' Customer Focus-Dedicated to satisfying customers' needs by being responsive, professional, efficient and needs by being responsive, professional, efficient and reliable.reliable.Innovative Approach-Dedicated to being creative in Innovative Approach-Dedicated to being creative in the development and provision of financial solutions.the development and provision of financial solutions.Staff Focus-Dedicated to staff empowerment and Staff Focus-Dedicated to staff empowerment and motivation to foster a culture of productivity and motivation to foster a culture of productivity and commitment. commitment. Social Responsibility-Dedicated to being a Social Responsibility-Dedicated to being a responsible and good corporate citizen.responsible and good corporate citizen.

OUR DRIVING FORCEOUR DRIVING FORCE

To be the preferred bank where excellence is a virtue. To be the preferred bank where excellence is a virtue. This will be achieved through innovative service This will be achieved through innovative service delivery, competency and flexibility whilst adhering delivery, competency and flexibility whilst adhering to principles of integrity, transparency and fairness.to principles of integrity, transparency and fairness.

Why small holder farming sector Why small holder farming sector still remains grossly under- funded, still remains grossly under- funded,

the Commercial Banks’ the Commercial Banks’ perspectiveperspective

Lack of tangible collateralLack of tangible collateral

Fragmented nature of sectorFragmented nature of sector

Yields of crops are normally below economic Yields of crops are normally below economic thresholdsthresholds

Funding the small holder not cost effectiveFunding the small holder not cost effective

Lack of profitable marketsLack of profitable markets

Cost of moneyCost of money

How did CBZ Bank address the How did CBZ Bank address the needs of the sector?needs of the sector?

Opened a new unit for Community Banking to cater for micro Opened a new unit for Community Banking to cater for micro and small clients.and small clients.Employed specialised staff to dedicate their time to this special Employed specialised staff to dedicate their time to this special groupgroupAccepted household assets ,group guarantees and personal Accepted household assets ,group guarantees and personal guarantees as substitutes to the usual preferred tangible 1guarantees as substitutes to the usual preferred tangible 1stst class class security.security.Sourced technical support from CARE and grant assistance Sourced technical support from CARE and grant assistance from DFIDfrom DFIDDue to the high transaction costs associated with lending to Due to the high transaction costs associated with lending to micro and small client we employed the following:micro and small client we employed the following:

- Charged interest rates that covered admin costs, - Charged interest rates that covered admin costs, loan loan losseslosses and and cost of fundscost of funds

- Maintained levels of Delinquency at very low - Maintained levels of Delinquency at very low levels levels through use of effective group lending through use of effective group lending methodology methodology

- Linkages helped us to reach remote rural areas - Linkages helped us to reach remote rural areas

How did CBZ face these challenges?. How did CBZ face these challenges?. continuedcontinued

We took a holistic approach to serve this sector (All We took a holistic approach to serve this sector (All financial services)financial services)Worked with other PVOs operating in Rural areas by Worked with other PVOs operating in Rural areas by going into partnershipsgoing into partnershipsWorked with other big institutions whose core Worked with other big institutions whose core businesses is Agricultural Production ( Out growers businesses is Agricultural Production ( Out growers Scheme)Scheme)Grouped small communal farmers for purposes of Grouped small communal farmers for purposes of marketing large quantities of produce.marketing large quantities of produce.

Successful Partnerships in Our rural Successful Partnerships in Our rural expansion thrustexpansion thrust

Initiative for the Development and Equity in African Initiative for the Development and Equity in African Agriculture (IDEAA)-provision of in calf heifers to Agriculture (IDEAA)-provision of in calf heifers to small holder farmerssmall holder farmers

Farmers Association of Chiefs/Headman Investment Farmers Association of Chiefs/Headman Investment Groups (FACHIG)-provision of agricultural inputs to Groups (FACHIG)-provision of agricultural inputs to communal farmerscommunal farmers

Southern Alliance for Indigenous Resources Southern Alliance for Indigenous Resources (SAFIRE)-sustainable use of natural resources(SAFIRE)-sustainable use of natural resources

What does CBZ have in store?What does CBZ have in store?

Agricultural Thrust mainly Agricultural Thrust mainly expansionexpansion in rural in rural areas / Resettlement areasareas / Resettlement areas

Value chain conceptValue chain concept

Partnership /Linkages to be increasedPartnership /Linkages to be increased

NetworkingNetworking

Recommendations for Improving Recommendations for Improving Service Delivery To Rural ClientsService Delivery To Rural ClientsOther banks must take a leaf from our Other banks must take a leaf from our experiences, for we cannot reach all the experiences, for we cannot reach all the deserving clients.deserving clients.Government must seriously consider the issue of Government must seriously consider the issue of incentivising those offering their services in the incentivising those offering their services in the rural areas so that more players can come in.rural areas so that more players can come in.The concept of value chaining financing must be The concept of value chaining financing must be promoted.promoted.Use of mobile banks must be encouraged in Use of mobile banks must be encouraged in order to reach remote areas. order to reach remote areas.

ConclusionConclusion

Our country’s economy is Agrobased and for it to Our country’s economy is Agrobased and for it to reach its desired objectives Financial institutions reach its desired objectives Financial institutions especially Commercial Banks must play a key role especially Commercial Banks must play a key role and CBZ has led by example in our country. Special and CBZ has led by example in our country. Special mention must go to our Central Bank which mention must go to our Central Bank which is is supporting Agriculture through a number of supporting Agriculture through a number of initiatives such as:initiatives such as:

o The Mechanisation ProgrammeThe Mechanisation Programmeo Cheaper sources of fundsCheaper sources of fundso Technical AssistanceTechnical Assistance I am very optimistic that with such kind of I am very optimistic that with such kind of

innovations (Thinking outside the box) the country innovations (Thinking outside the box) the country and the region can confidently say we will achieve and the region can confidently say we will achieve the set MDGsthe set MDGs

Conclusion….continuedConclusion….continued

I THANK YOU.I THANK YOU.