Ivan Zhakata
Herald Correspondent
TREASURY has allayed concerns over delayed remittances of salary deductions to banks and microfinance institutions, saying the move was a deliberate compliance measure to curb illegal lending practices targeting civil servants.
In a statement yesterday, Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, said the Treasury had noted reports regarding delays in remitting payroll-deducted loan repayments processed through the Salary Service Bureau (SSB).
He said the delays had occurred over the past four months.
“Over the past four months, Treasury acknowledges that there have been delays in the disbursement of payroll-deducted loan repayments to certain financial institutions,” said Prof Ncube.
“These delays, however, do not reflect any breakdown in public financial management systems.”
Prof Ncube said the delays resulted from an urgent and comprehensive investigation into widespread non-compliance by some banks and microfinance institutions.
“This investigation was triggered by mounting evidence of exorbitant interest rates being charged by certain microfinance institutions and banks,” he said.
The minister noted that some lenders were operating in violation of the Money lending and Rates of Interest Act, the Microfinance Act, and the common law in duplum rule, which prohibits interest charges from exceeding the principal debt.
A number of institutions had breached regulatory provisions that cap loan repayments at 50 percent of a borrower’s net monthly salary, he said.
“In some extreme cases, civil servants were left with virtually no disposable income, with 100 percent or more of their net earnings being absorbed by loan deductions,” said Prof Ncube.
He stated that the situation has created serious social and economic challenges for affected public servants, prompting Treasury to intervene to protect workers and enforce compliance.
Prof Ncube said Treasury temporarily withheld remittances to allow for a full compliance audit of all payroll-linked lenders and to facilitate regulatory engagement with the Reserve Bank of Zimbabwe (RBZ) and other oversight bodies.
“As of today, Treasury has resolved the remittance issues with the vast majority of participating financial institutions, and payments have resumed following confirmation of regulatory compliance,” he said.
Prof Ncube noted that only two institutions remained under active review, with discussions ongoing to address outstanding concerns within the framework of the law.
He reaffirmed the Government’s commitment to preserving the integrity and credibility of the payroll deduction system, which supports access to credit and other essential services for civil servants.
“It is important to emphasise that the withholding of remittances was never intended to repudiate the Government’s obligations, but rather to restore discipline and accountability in the lending process.”
Prof Ncube concluded that Treasury will continue working with the RBZ, the Insurance and Pensions Commission (IPEC), and other agencies to strengthen oversight and ensure ethical and lawful lending practices across the financial sector.
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