NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, February 18, 2015

Financial inclusion in Zimbabwe increased to 77 percent in 2014 from 60 percent in 2011 mainly driven by mobile money platforms, the FinScope Consumer Survey has shown. According to the survey, which was launched yesterday, 45 percent of the population (3,15 million) is registered with mobile money platforms. Of those who are registered users, 80 percent use it to remit while 46 percent use it to transact in order to pay utility bills, buy airtime, etc.

The study revealed that the banked population has increased from 24 percent (1,45 million) in 2011 to 30 percent (2,08 million) in 2014 while 70 percent of the population is unbanked.

The majority of the unbanked indicated that they do not need a bank account (74 percent) while some said they could not afford an account.

Low incomes resulting in the inability to maintain the minimum balances required by banking institutions, have been assessed to be the major reasons for low savings and the high rate of financial exclusion in the economy.

Since the economy dollarised in February 2009, economic analysts have attributed the slow pace of savings growth, and the significant numbers of unbanked people in the economy to the alleged low consumer confidence in the banking sector, and the perceived high costs of banking.

However, the recently completed tracking survey, Finscope 2014, reveals an interesting new dimension that, it is instead, the low average consumer incomes, which leave people with very little space to save money, thus taking away the need to have a bank account, that has largely driven people to shy away from using formal financial services.