The Impact of Digital Banking on Financial Inclusion in Zimbabwe. A case of Steward Bank.

Author

MACHAKA, ANGELA NYASHADZASHE

Title

The Impact of Digital Banking on Financial Inclusion in Zimbabwe. A case of Steward Bank.

Abstract

Financial inclusion, which means access to formal financial services for the whole population is one of the Reserve Bank of Zimbabwe important policy objective. In this study, we examine the impact of digital banking on financial inclusion in Zimbabwe using a case of Steward Bank. Gender, age, education, income levels, work status, the cost of financial services, account opening procedures, and level of trust in the financial system are all key factors of financial inclusion in Zimbabwe, according to this study. Although mobile banking services were mostly used for airtime purchases, the study found that they were promoting financial inclusion because 7 out of 10 clients (account holders) used mobile banking services for cash withdrawals and deposits, and 6 out of 10 clients used mobile money to settle bills. The study also found that 60% of the rural communities found it difficult to deposit savings on their mobile banking accounts suggesting that although mobile banking services provided a platform for savings, few rural members in rural areas could make their savings on their accounts without visiting the banks. Financial illiteracy, a lack of formal identification documents, a lack of faith in the financial system, a shaky economy, rural poverty, gender inequality, and high transaction costs of financial services are all obstacles to financial inclusion in Zimbabwe. Mobile money services such as Eco-cash, Tel-cash, and One-money, on the other hand, have shown to be a viable option for inclusive finance in Zimbabwe. Furthermore, one of the measures to improve inclusive finance for women in Zimbabwe was the formation of the Women's Bank of Zimbabwe. The Reserve Bank of Zimbabwe's financial inclusion policy and eased KYC criteria for low-income groups are intended to promote financial inclusion. The government should adopt policies that target marginalized populations such as the elderly, rural population, low-income earners, ladies, and the unemployed to make finance inclusive, according to this study. In addition, the government should establish a robust consumer protection regulatory framework, promote financial literacy, lower the cost of financial services transactions, and encourage the usage of accounts with reduced KYC criteria to decrease paperwork requirements.

Date

2022

Publisher

BUSE

Keywords

Digital banking

Electronic payment

Financial inclusion

Supervisor

Dr Maune