Financial inclusion is a key component of many national sustainable development goals and part of the G20 agenda. SIVIO Institute’s latest report offers insights into the impact of Zimbabwe’s National Financial Inclusion Strategy on Macro, Small and Medium Enterprises. Read on!
In the year 2016, the Government of Zimbabwe (GoZ) introduced the National Financial Inclusion Strategy (NFIS) which was inspired by the desire to ensure that economic agents are adequately integrated within existing financial services inclusive of savings, credit and insurance provided by private and government players across Zimbabwe. Prior to this, Zimbabwe had become the 86th member of the Maya Declaration in 20121 and the NFIS was the country’s effort to make Financial Inclusion (FI) a priority for Zimbabwe’s development. FI is a key component of many national sustainable development goals and part of the G202 agenda.
The Reserve Bank of Zimbabwe (RBZ) acknowledges the benefits of financial inclusion some of which include:
- Promotion of inclusive and equitable development leading to poverty reduction;
- Enabling freedom from of citizens from informal lenders who charge high interest rates;
- Faster economic growth rates; » Growth of formal credit sources;
- Increased formalisation of the economy;
- Increased employment;
- Enhanced financial stability.
To this end, GoZ introduced the NFIS in 2016, and the first phase of the strategy ended in 2020. A new strategy is currently being developed and its main objective is to build upon the success of the first phase of the strategy whilst reshaping some aspects of implementation. The NFIS used data from the 2014 Fin Scope survey, which highlighted key vulnerable groups namely Micro,Small and Medium Enterprises (MSME’s), women, youth and people living with disabilities.
According to the RBZ (2020), in 2014, 23% of the Zimbabwean adult population was financially excluded without access to a bank account. The NFIS sought to improve inclusion within various themes namely improving access of women, youth and people living with disabilities, improving access of MSMEs, improving agriculture and rural finance, improving digital financial services, improving microfinance, and improving access to insurance, pensions, and capital markets.
In this report, we analyse, the impact of the NFIS (2016 to 2020) on MSMEs. The report is based on findings from a survey that was carried out across rural and urban areas in Zimbabwe. The survey focused on entrepreneurs who run micro, small and medium scale enterprises to assess their level of financial inclusion, and understanding the progress that has been made since the NFIS was introduced in 2016. However, some gaps in the system need to be identified for robust recommendations considering that the NFIS Phase 2 planning and implementation process is on-going.
Read the full report here (4MB PDF)
Source: SIVIO Institute
