Financial inclusion is when individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.
With the recent drive on the use of plastic money which the country adopted given the cash crisis currently facing the country, it must be said, Zimbabwe is now ready to foster financial inclusion. This follows the recent events in the country’s financial sector- first the Women Bank officially opened this month and now the Empowerment Bank earmarked for opening by month end.
Whilst one might not have an incentive to open an account, it has become of paramount importance to have one now, as plastic money has become an efficient transacting means locally and internationally. And stringent requirement towards opening a bank account had left many (especially women and those informally employed) at the mercy of mobile transfer agencies such as Ecocash, One Wallet and Telecash for transacting electronically.
However, Government through these new banks which will have less stringent measure to be a bank account holder will therefore facilitate financial inclusion for the previously financially excluded – mainly women and youths so as to improve Zimbabwean's livelihoods, maybe via provision of credit lines.
Being able to have access to a transaction account is the first step towards broader financial inclusion since a transaction account allows people to store money, send and receive payments. A transaction account can also serve as a gateway to other financial services, which is why ensuring that people countrywide can have access to a transaction account is of paramount importance.
According to the world’s Universal Financial Access 2020 initiative, adults, who currently aren't part of the formal financial system, should be able to have access to a transaction account, the basic building block to manage their financial lives by year 2020.
The new dispensation having realised that financial access facilitates day-to-day living, and helps families and businesses plan for everything from long-term goals to unexpected emergencies is therefore on a drive to ensure that every citizen has access to a bank account.
Small to medium entrepreneurs (SMEs), cross-border traders currently characterise the larger chunk of the country’s economic landscape and yet according to the Reserve Bank of Zimbabwe (RBZ) only thirty- four 34% of women were involved in the country’s financial sector, while youths also had their negligent fraction, with the rest occupied by men.
As accountholders, (women and youths) people will be more likely to use other financial services, such as credit and insurance, to start and expand businesses, invest in education or health, manage risk, and weather financial shocks, which can improve the overall quality of lives.
The new banks are also expected to avail loans to the targeted groups at reasonable interest, with less stringent requirements to women and youths who usually fail to access money from conventional banks due to lack of collateral.
It is estimated that of the 5,4 million people that are in the country’s informal sector, about 80% of them are women and youths engaged in vending and various entrepreneurial projects, who require help. And the significant hindrance has been financial exclusion, which the new dispensation has given priority to redress through the establishment of the Zimbabwe Women’s Micro-Finance Bank and youth’s Empower Bank.