Posted August 2000
In Africa, rural banks should be as much factors for economic growth as vehicles for social change.30 They should provide opportunities for rural farmers, both poor and rich, to access capital with which to enhance agricultural activities31 as well as initiate new development projects. While they have been useful to a tiny segment of the rural population32 rural banks have remained on the periphery of most villagers.33 In the village which has 28 households, there are only seven people with bank accounts. The rest do not have and don't even think of opening bank savings accounts either now or in the future. This chapter addresses these issues. It analyses the reasons why banks continue to be disregarded by villagers. It notes that banks are not accessible to villagers, that they have cumbersome bureaucratic rules that deter prospective clients and that they are regarded as extracting wealthy from the village economy. It concludes that banks, as currently constituted, are a poor means for social change to this and other villages in rural Africa.
The chapter is divided into three major sections. The first section examines the background to banking in the village, the kinds of banks available for villagers. The second and more detailed section examines the reasons why banks continue to be disregarded by villagers. The third and final sections outlines the major conclusions as well as the way forward.
There are more than 10 banking institutions in Zimbabwe. These include Zimbank, Standard Chartered, Cabs, Barclays, Berverly, Commercial bank of Zimbabwe, Time Bank of Zimbabwe, Stanbic, Founders and the Post Office Savings Bank. All these banking institutions have 239 branches in urban areas, (Chimedza, 1994); but there are only 66 such rural branches, a typical indicator of urban bias. For example, the area of study has one bank, the Post Office Savings Bank. The Bank is located at Chivi Growth Point, a fast changing semi-urban settlement. For those district residents who desire alternative banks, Masvingo town offers a variety of these. There are buses which link the town and the growth point. However there are no buses which link villages with growth points.
While most savings account holders at the Post Office Savings Bank branch are old people who have or had access to cash, officials manning the banks are always young people who are fresh from college. Though they are Shona, these young people speak English, which is the official language for banking. Sometimes these young people cannot cope with the volume of clients, particularly at the end of the month.
Since 1995, a numbers of banks and financial institutions in Zimbabwe have collapsed, and their owners have either fled the country or have died. Commercial banks offer between 18-22 percent interest on ordinary savings accounts. Their lending rate is over 50 percent. They also charge, much to the anger of illiterate villagers, a variety of additional levies of service charges to cover the costs of administration of accounts.
In the sections below, I examine the some of the reasons why most Mazoredze residents do not use banks.
Some villagers say that the banking facilities are far away from them. Major banks are found in Masvingo, a town over 50 km away. They say the nearest bank is not located within the village but rather at the growth point. As one old man remarked rhetorically:
Villagers describe the growth point as a place for the young and fit, because it is far away and reachable mostly by those who are healthy - the young and fit. The bank is 9 kilometres away from the village.
It is not just the number of kilometers which makes the growth point appear to be far away. According to the village, two additional factors make the place appear to be far away. The first is that there is no regular transport, as in many parts of Zimbabwe's countryside, to ferry people. This means villagers have to walk to the growth point where the services are located. During the dry season, when there is no rain and the road is visible and less bumpy, the Member of Parliament provides a small bus that plies the road. This is usually the case just before the major parliamentary elections. It is possible that he provides the service more to make money and build his reputation than as a public service. The bus charges 40.00 dollars, which many people complain is very high but which the operator says is too low to cover the vehicle's wear and tear. Because they can not influence the Member of Parliament to reduce his fare, common people with pressing business often walk, or take rides in scotch carts, letting the bus pass them. But such sights of a bus on the road are rare for it is not too long before the bus is off the road due to breakdown.
The second factor that makes the growth point seem unreachable and apparently remote is that there are no settlements until one gets to the bank, nor public places to rest. This makes the prospect of starting a journey a frightening reality, as the remark from Mr. Muse, a middle aged person, reveals.
Some people say they do not make use of banks because these are located kuchirungu. Mutasa, one of the oldest people in the village remarked:
But what is this chirungu and what makes it scare away people who otherwise would want to access facilities located therein? To the villagers, Chirungu donates a place with all the pleasures of the earth, from music, films, bottled beer, toasted cigarettes, sweets, to mention a few. All villagers know, however, that these places also harbor bad people, including thieves, robbers and muggers, and prostitutes. As one farmer said, the place is home to 'distilled criminals'. 'Distilled' because these suspected criminals allegedly use sophisticated methods to steal and evade the law. 'They know how to beat and bribe their way out' remarked Denga, about these suspected criminals who dwell muchirungu.
According to villagers, these are the kind of people who way-lay potential savers and investors. While there has not been cases of robbery, villagers are not convinced that their fears maybe wrong if not exaggerated. For them, the absence of reported crimes simply means that the robbers are waiting for any opportune time, as one villager head, Tich, said:
Clearly, it is what they believe rather than what actually happens which leads people to avoid making the long journey to the place where the bank is located.
Some villagers who desire to open accounts with the local bank say that they are put off by a lot of the bureaucracy at the bank. A vendor, Ms. Muja, who has given up opening a savings account, remarked:
Villagers say the bank requires patience since prospective account holders must queue to get forms to open an account. During fieldwork we were able to verify the authenticity of these claims. On one day, the queue of clients, mostly civil servants, protruded from the 'banking hall', stretching for nearly 100m on the open ground. We also heard, but were not able to get independent confirmation, of customers who collapsed while queuing for service.
Some villagers say that it is not queuing which irks them a great deal. It is the forms they have to fill out and sign. Mr. Tano, a retired builder who once operated an account, remarked that:
Another villager, Tara, graphically remarked
Some villagers cannot read and write, and have to be helped by other people. I personally assisted a number of account holders from other villages to complete forms. I suspect that complaints about paper work, also reflect the strain that comes from being forced to expose, routinely, one's illiteracy.
But if there is one element of bureaucracy that discourages many villagers from dealing with banks, it is being made to provide suitable identification each time they make a transaction. For villagers their word should be a sufficient basis to be allowed to access their money. 'They found it hard to believe my word that I was the holder of the account' remarked an ex-account holder, Ms. Taka.
Villagers protest that requiring them to furnish proof of identity is tantamount to regarding them as insane. For them, only insane people require supporting documentation to be believed and to prove their identity. The argument by banks that the detailed procedures are meant to protect clients' accounts are dismissed by the villagers, some of whom think that the real criminals are bank officials.
When asked to comment on why he did not put his money in banks, one elderly man, Chiza, remarked:
Similarly, a man described bankers 'as snakes which bite while hidden in the grass and sand.' Whatever positive qualities bankers may have, all villagers agree that they are the opposite of what they seem. They harm instead of saving people.
Villagers say bankers are crafty robbers because they start banks in order to cheat people of their savings. They say that such unscrupulous men often disappear as soon as they have sufficient deposits to assure them a good life. Villagers supporting this point cite the case of two known Zimbabweans who in 1995 appeared on radio and television, invited rural traders to invest money in their institution in return for huge profits, but shortly skipped the country with the savings they stole. They also cite, with bitterness, the example of a prominent banker, born in the same area, who promised houses for those who opened accounts with him but diverted the savings to start his own businesses.
It is not the fear of losing their savings alone that leads villagers to decide against dealing with banks. Knowing that they will never be able to recover their savings as well as see the swindlers escape punishment are two factors which deter villagers from making use of banks. People say that in all the known cases of swindle, no person has yet been brought before the law and be incarcerated for their evil. Mr. Handi remarked,
Criminal cases of this nature normally take a lot of time before conclusion. I suspect that the law is taking its course and that the law enforcers are marshalling evidence to nail the alleged criminals. Villagers agree with this point but they wonder what further evidence is required particularly where the criminal has formally apologised to the public for his wrong deeds and publicly claim to be repented. Mika, a villager who knows a great deal about these swindlers, remarked,
In Zimbabwe, criminals have been known to escape justice, much to the exasperation of villagers who have a clear sense of morality and justice. Given this background, villagers are perhaps justified in suspecting that the prolonged process of evidence gathering may be nothing more than an attempt to find ways of defeating the course of justice.
Other villagers say that they do not want to open bank accounts because of the treatment they get from bank tellers. Some complain of being addressed in a foreign language.
Ms. Denga, an enterprising woman, remembers how when she wanted to make a huge withdrawal she was answered back in English. She says she wanted to ask for more details, but she was embarrassed and did not wish clients to know she could not speak the English language. In the end, she went home and sold her goat to raise the money she needed. It is very possible that when bank tellers use English they do so more as a matter of habit than as a calculated strategy to confuse villagers. It may be that bank tellers use English rather than Shona because the former easily lends itself as language for business. Whatever the reasons, villagers interpret this as lack of impropriety on the part of the bank tellers.
Other villagers complain that they are hurried 'like children' over the banking process. Ms. Shumba says she was directed to another counter before she even finished explaining her problem. On that counter she was promptly sent to another desk, only to be redirected to the first counter. 'They tossed me like a ball' Ms. Shumba recalled years later, 'as if I was a toddler.'
It is possible that when tellers act like this they may be responding to pressure of work. As pointed earlier, banks are often the place for queues. Perhaps, by giving minimum time to each client, bank officials might be hoping to clear long queues. Similarly, the prompt rerouting of clients maybe aimed at assisting customers in getting appropriate services. The irony is that peasants interpret these actions as strategies to harass them, resulting in some closing their accounts. Chikara, who could not stand the imagined insolence, closed his account and decided that his 'hut would be his account and his pillow the passbook.' He remarked years later, 'I am not a child to be tossed like that when I have the money.'
Other villagers say they do not make use of banks because they regard them as institutions of extortion. Ms. Hove thought that banks were a clever way of cheating people, while Muja, an illiterate farmer, dismissed them as a deception.
For villagers, the greatest proof of trickery is that banks unilaterally get money from account holders. Ms. Hove, one of the few people who has a current account, said that the bank charges were very high that they would dent an account. She remarked:
The problem of suspicion arises because people have their own concept of a bank. For them a bank is one that does two related things, namely, it keeps people's balances safe and assists account holders in making more money through interest earnings. Thus, when they see a difference between what they think they have and what they actually have in their account, they immediately interpret this as a sign of wickedness on the part of the bank. Banks try to explain these to their villagers, but their explanation, diplomatically done in English more likely provides additional evidence of them as 'smooth criminals.' According to villagers, criminals speak softly and use a cryptic language to hide their deception.
People also say that banks are not reliable and are capable of collapsing any time. When my assistant tried to interest the village about making use of the new village bank, he was laughed off and rhetorically answered:
When asked why he kept his money in the hut, Mr. Mape said this was only the safe place to keep money.
That villagers should think like this is neither a function of conservatism nor fear to take on risks. These skeptical thoughts are based on events that are rocking the financial sector in Zimbabwe. All the villagers reported being aware of the 4 banks which have collapsed in the last 3 years. And there is a one person in the village whose 2 sons lost their savings in one of the merchant banks in the country. But the fact that no one currently living in the village has directly lost money in a collapsed bank would suggest that it is the fear of what banks can do rather than what they have done that lead many to recoil from patronizing them.
Some villagers, particularly the elderly, say they do not want to make use of banks because they do not regard them as existing to solve their own territorial and lineage problems. When the local bank announced that it would be relocating to Masvingo, some district people with accounts mourned that this would make it even more difficult for them to access their money. But there are others like Mache who expressed satisfaction that the absence of the bank would ensure that money remained in the local economy. 'You see', he remarked when he heard the news of the banks' decision to relocate to Masvingo, 'these banks have always been taking our money'. But he, like other villagers, did not specify how this economic drainage actually took place.
Although somewhat unclear how these banks get their money, villagers are convinced about the uses to which their money is put. They say their money is used to solve problems for other lineage's with whom they share no totemic, ancestral, lineal or territorial ties. For them, it would be better, or at least more palatable, if their savings were used for some other cause.
In the village, people do not trust banks. Villagers consider the banks as existing to solve needs of other people rather than their own. Others say banks are too bureaucratic and lack the human and cultural touch that they are used to. This makes banks of little value in assisting people to save. What people need are trustworthy, simple and flexible financial institutions which are easily accessible to them. Since this particular type is not available and since the credit facilities are not useful, rural people begin or rather intensify their participation in saving groups, the next topic for consideration.
31C. Mumbengegwi, 1987. Continuity and change in agricultural policy.
32P. Raikes, 1984. The state and the peasantry in Tanzania; S. Berry, 1986. Social sciences perspective on food in Africa.
33J. Brown and G. Gallant, 1999. Evaluation of the Village Bank.Saving to death: Chapter 1 | Chapter 2 | Chapter 3 | Chapter 4 | Chapter 5 | Chapter 6 | Chapter 7 | Chapter 8 | Chapter 9 | Chapter 10 | Chapter 11 | Bibliography
 
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