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19/02/2013 00:00:00
by Tafirenyika Makunike
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I HAD an opportunity to peruse through the FinScope Zimbabwe Consumer Survey 2011 launched in May 2012 for stakeholders in the finance and insurance services sector in Zimbabwe.

The study was Commissioned by the Ministry of Finance and implemented by FinMark Trust of South Africa. The actual survey was conducted by the Zimbabwe National Statistics Agency (ZIMSTAT) during the period July 2011 to November 2011 is the nearest we have in terms of baseline data on the levels of financial inclusion in Zimbabwe.

The study was a nationally representative consumer survey of a total of 3,984 adult Zimbabweans (18 years and older) which reveals some characteristics of the Zimbabwean socio-economic landscape. The survey spoke to how individuals source their incomes and manage their financial lives. It also provided insight into attitudes and perceptions regarding financial products and services.

It highlighted the fact that a large number of Zimbabweans remain locked out of the formal financial system for which FinScope used the term “financial exclusion”. According to FinScope, the ‘financially excluded’ segment refers to individuals who manage their financial lives without the use of any financial products or mechanisms external to their personal relationships.

They further went on to elaborate on financially excluded people as “adults who do not have or use any financial products and or services – if borrowing, they rely only on friends or family; and if saving, they save at home”. This was contrasted to financially included people who are “adults who have or use financial products and or services, formal and or informal.”

Formally served were adults who have or use financial products and or services provided by a financial institution (bank and or non-bank) while informally served were adults who have or use financial products and or services which are not regulated, e.g. cooperatives, farmers associations, savings clubs or groups, private money-lenders.

The FinScope Zimbabwe Consumer Survey revealed that 38% of adults are formally served, including both banked, and other formal bank products or services.

Banked individuals were adults who have or use financial products and or services provided by a commercial bank regulated by the central bank and only 24% of adult Zimbabweans are in this category. The banking is mainly driven by transactional and saving products, 19% of banked adults use transactional products, 17% use savings products, 5% use banking for remittance purposes and only 3% use credit banking products.


From a socio-economic perspective the survey indicated that 66% reside in households with no piped water (inside or outside the house), while 67% reside in households that use firewood as the main source of energy for cooking.

Putting the findings into SADC perspective, SA leads with a 63% banked population, Namibia at 62%, Swaziland at 44% and Botswana at 41% against our paltry 24%. Faced with these really stubborn facts, we need to put aside our big national ego and identify policy drivers to financial inclusion.

FinScope established that 31% of the adults in Zimbabwe do not save. It was observed that 27% of the adults keep all their savings at home and 16% rely only on informal mechanisms such as savings groups. It was also noted that 9% of the adults have or use other formal non-bank savings products, while 17% of the individuals have savings products from a bank.

Of those people who save, many are most likely to save at home with savings mainly for the purpose of paying for living expenses during hard times as well as for education, school fees and emergencies.

With respect to risks and insurance, 69% of Zimbabweans do not have any kind of financial product covering risk, while 12% of the adults rely only on informal mechanisms such as burial societies.

The findings also indicated that 40% of adults in Zimbabwe send or receive money. People mainly receive money from outside Zimbabwe. The main form of remittance mechanism (58%) is to send or receive money through friends and family members. It was noted that 12% of the adults use formal products or services to send or receive money. More Zimbabweans receive money than send money, indicating the vital role of remittances from the Diaspora.

Financial exclusion is particularly high in the rural areas possibly due to limited accessibility to banks and formal salaried employment opportunities. Current products/services seem to focus on adults who receive a regular salary.

In terms of connectivity, 85 percent of the population had access to a cellphone, while only 16 percent had access to the internet.

In Zimbabwe there are opportunities for appropriately priced, easy to use products and formal financial services within easy reach of the population. 46% of Zimbabweans said they would like to use their cell phone internet to transfer money or make payments.

Mobile banking has the potential to have a significant impact on financial inclusion in Zimbabwe. Mobile banking is one of the electronic payment platforms identified by Kenya to reduce the amount of cash in circulation. In the previous financial year, Kenya’s highly successful mobile banking platform, M-Pesa contributed $203 million to operator Safaricom’s total revenues.

While the rest of the market was prevaricating, Zimbabwe’s Econet Wireless launched a mobile money transfer service, Eco-Cash, end of 2011 and is building its own mobile money ecosystem to take advantage of this huge identified gap. We have a high penetration of mobile phone users which presents mobile phones an ideal platform to increase outreach of financial services to the rural population as their penetration is already large and growing.

A bank can reach its customers as well as to widen its customer base without investments in physical infrastructure like branches and ATMs through branchless banking offered by mobile banking which often cuts the need for travelling and queuing.

It is an opportunity for banks to increase their clientele base by including customers who are outside the range of their traditional bricks and mortar service delivery.

Unfortunately, this study did not specifically look at Zimbabwean SMEs which are largely unbanked and access to finance is a major obstacle. Financial inclusion seeks to ensure access to basic financial services by all, promoting economic growth, socio-economic empowerment, and wealth creation while inculcating a savings culture in rural areas. It is time the financial sector become responsive to the needs of the wider economy in Zimbabwe.

Tafirenyika L. Makunike is the chairman and founder of Nepachem cc (www.nepachem.co.za), an enterprise development and consulting company. He writes in his personal capacity

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