THE Reserve Bank of Zimbabwe (RBZ) says any banking institution whose strategy does not focus on micro-small-and-medium enterprises (MSME), rural farmers, and youths, is suffocating financial inclusion.
Speaking at the Zimbabwe Independent 2022 Banks and Baking Survey Awards ceremony in Harare on Wednesday, RBZ deputy director of bank supervision Rachel Mushosho bemoaned inadequate data saying this perpetuated gender and age gaps in financial Inclusion.
The survey was under the theme: Ramping up financial inclusion: Casting the net wider!
“Any strategy of a banking institution that does not focus on the target segments such as women, MSME, rural farmers, and youths, is suboptimal. The lack of data perpetuates gender and age gaps in financial inclusion. An effective stakeholder coordination framework involving all relevant stakeholders is crucial.
“For banking institutions that are serious about casting their nets wider, then financial inclusion is definitely a key enabler! You should make use of improved livelihoods and financial capability of the target segments through sustainable usage of financial services and a combination of knowledge, skills, attitudes and confidence to make sound financial decisions,” Mushosho said.
Zimbabwe’s aim is to become an upper-middle-income economy by 2030.
The NDS1 (2021-2025) is under implementation and one of its objectives is to achieve equitable real GDP growth.
Mushosho added that ramping up financial inclusion will cast the net wider for the banking sector.
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“It’s not sufficient to have access to a banking account; the question is if you have a bank account, are you using it? We are trying to link up the financial inclusion strategy to the global context as Zimbabwe is a signatory to the 2020 sustainable development goals (SDGs),” she said.
Mushosho said the central bank has linked its national financial inclusion strategy (NFSI) to the NDS1.
Meanwhile, the Banks and Banking Survey noted a myriad of challenges impeding financial inclusion including low levels of financial literacy, de-formalisation of the economy, cash intensive transactions and confidence issues from historical circumstances.
Lead analyst for Erccro Consulting Enock Rukarwa told delegates that key challenges presented in the survey included poor infrastructure in the country.
“The RBZ launched the Financial Inclusion Strategy 1 (2016-2020) and Financial Inclusion Strategy 2 commenced in the third quarter of 2022. There are success stories which include increases in access to financial services and growth in women and youth banking penetration.
“We have also seen the expansion of digital capabilities. However, there have been challenges too, impeding financial inclusion in the sector. These include elevated credit risk in marginalised lending (microfinance lending) as well as systematic risk in relation to challenging economic environment, de-formalisation of the economy, cash-intensive transactions and confidence issues from historical circumstances, among others,” Rukarwa said.
