Global Journal of Commerce & Management Perspective
Open Access

Abstract

A Critical Analysis of the Survival Strategies Used By Commercial Banks in Zimbabwe Post Dollarisation (2009-2015)

Tshuma Nothando, Karasa Nyasha & Trymore Kaduwo

Bank failure has been very common in Zimbabwe in recent years. The situation has worsened despite the dollarization of the economy. This research sought to critically analyze the survival strategies used by commercial banks in Zimbabwe post dollarization (2009-2015). A descriptive survey design was adopted. Primary data was collected using questionnaires. Secondary data from published journals and text books was used as a complement to primary data. The study revealed that strategies used by commercial banks include product differentiation, superior distribution channels, adequate risk management as well as technological innovation. Challenges faced by bank were found to be cash shortage, lack of lender of last resort, stringent regulation, high capital requirements and high operating costs. Political, economic, technological and legal factors were found to be the major external environmental factors that influence strategy implementation. The study also revealed that the major internal business factors that influence strategy implementation include resource availability, organizational structure, effective communication and good leadership. It was found that there is a strong positive relationship between strategy and bank performance. The study recommended that banks should encourage and educate customers on the use of plastic money to curb the problem of cash shortage. Banks should embrace technology so as to improve product innovation. RBZ should loosen its regulatory framework so as to create a conducive operating environment. The central bank should engage with the government for the recapitalization of the RBZ.