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Tinashe Makichi : Business Reporter

The National Social Security Authority will increase it’s building society’s capitalisation level of $25 million only on condition the newly formed institution achieves meaningful returns. The National Building Society which is wholly owned by NSSA was officially launched yesterday by Vice President Emmerson Mnangagwa.NBS was created out of the National Pension Scheme which holds a 60 percent stake and the Workers Compensation Insurance Fund with 40 percent. Both funds are administered by NSSA which acts as the shareholder representative.

The building society’s sole responsibility after the launch is to ensure that it serves the people by giving a return to the pension contributors while also delivering services that meet the needs of the people of Zimbabwe.

NSSA board chairman Robin Vela speaking on the sidelines of the launch said increasing capitalisation of the building society will be based on how the institution will fare on the market which is currently facing liquidity constraints and low disposable income among consumers.

“The increase in the current capitalisation of the building society going forward will depend on performance demand because ultimately NBS must deliver returns first.

“NBS is similar to any other investments and it has to perform according to expectations. If they can demonstrate that they can achieve meaningful returns then we will consider recapitalising. Our target at the moment is to deliver housing to the people,” said Mr Vela.

“NBS must be a profit-making business because we value the pensioner funds that have been injected in the project,” he said.

The building society has interest rates pegged at 9,5 percent and this makes it a serious competitor in a market already dominated by the likes of CABS, FBC Building Society and ZB Building Society.

NBS was established with the sole purpose of providing access to affordable housing to the general public banked with NBS and facilitate housing delivery as enunciated in the Zimbabwe Agenda for Sustainable Socio-Economic Transformation.

NBS managing director Ken Chitando said the launch of the building society is a direct response to not only a Government initiative but requests to provide a benefit to NSSA contributors prior to retirement age.

He said the building society aims to provide a one-stop-shop for financial services to clients which will include providing finance for fixed assets and expand financial inclusion in the country while also supporting NSSA service delivery.

Vice President Emmerson Mnangagwa while officiating at the launch told the NBS board to uphold good corporate governance and safeguard contributor’s funds.

“We are coming from a history of bank failures that have been spurred by reckless lending and abuse of depositor’s funds. Actually when I was coming here I was told to bring money to open an account so you must look after our hard earned cash,” said Vice President Mnangagwa.

The second NBS branch will be opened in Bulawayo with the bank expected to leverage on NSSA’s wide network across the country.