Zimbabwe launches strategy to accelerate financial inclusion

Zimbabwe on Friday launched a five-year national financial inclusion strategy aimed at increasing the population of adults with access to financial services from the current 69 percent to 90 percent by 2020.

Reserve Bank of Zimbabwe Governor John Mangudya said at the launch that only 30 percent of Zimbabwe's adult population was banked, with some of the barriers to financial inclusion being low income, irregular income streams, high bank charges, financial illiteracy ad lack of public confidence in the banking sector.

He said the majority of women, small holder farmers, youths and small and medium enterprises were unbanked hence the strategy would target these segments of the population for financial inclusion.

The strategy would be underpinned by four pillars that are financial innovation, financial literacy, consumer protection and micro finance, he said.

With Zimbabwe's economy having transformed into an informal economy with small and medium enterprises (SMEs) now contributing 50 percent to GDP, it was imperative to have this sub-sector fully banked to promote economic growth, Mangudya said.

The governor said only 14 percent of the SMEs in the country were banked and 85 percent of them unregistered, posing a hindrance to their financial inclusion.

"It will be difficult to transform our economy when 50 percent of our economy is informal," he said.

Finance Minister Patrick Chinamasa who spoke at the same occasion asked local banks to take advantage of technology and come up with innovative products that attract informal traders, saying the banks "cannot afford to leave this sector which now constitutes the largest portion of our economy".

He said Zimbabwe needs an inclusive financial sector, noting that financial exclusion is one of the biggest barriers to economic development.

"Financial services inclusion can be a powerful driver of economic growth," he said. Enditem