Survey: Cash and Mobile Money Transactions Rise as Zimbabweans Shun Banking Sector
More than 80 percent of local transactions happen in cash as Zimbabweans continue to shun the formal banking process while more than 25 percent of bank accounts are dormant. According to a new survey titled “Making Access Possible (MAP) Diagnostic” conducted in Zimbabwe mobile money subscriptions grew by over 100 percent in the last two years as they are more preferred than banks for transactions.
MAP is a comprehensive market assessment of retail financial services. Its purpose is to assist the Government to identify key priorities and opportunities to extend access to financial services. The MAP framework has been developed in partnership between Cenfri, FinMark Trust and the United Nations Capital Development Fund.
Presenting the findings of MAP Diagnostic yesterday Cenfri technical director Mr Hennie Bester said mobile money subscriptions recorded a 72 percent growth in 2014. He said banks’ contribution to financial inclusion has declined and this calls for business model changes for banks to regain ground.
The survey showed that retail banking has continued on a downward trend. “Banking pricing model will kill them in this environment. There is need for mind shift in the banking sector,” said Mr Bester.
Finance and Economic Development Minister Patrick Chinamasa echoed the findings of the survey on the banking sector. He said while there has been a structural shift in the economy from formal to informal, banks have “not yet put their act together”.
“The banking sector has no idea on how to handle the informal sector. They do not have strategies. It has never happened to them. We must find strategies to supply this demand. This survey will give us key findings on the basis of which we can make informed policy in order to root this sector as the mainstream of the economy,” said Minister Chinamasa.