Financial Inclusion Strategy II to promote development

Grace Chekai

The National Financial Inclusion Strategy II (NFSI II) will see growth in both the formal and informal sectors thereby improving the livelihoods of all people. The Strategy is in pursuant with the Second Republic’s mantra of leaving no one and no place behind in development.

According to the National Financial Inclusion Strategy II (2022-2026) document, the strategy is expected to empower consumers to participate in economic activities.

“The Strategy acknowledges the significant progress achieved on the access front, and recognizes that access is the first step towards financial inclusion. The Strategy seeks to promote development, access and usage of suitable products and services that are affordable, convenient and aligned to customers` needs.

“Financial products and services that meet customer needs are frequently used which in turn empowers consumers to participate in economic activities, thereby contributing to the country`s national development aspirations,” states the document.

According to the document, in order to facilitate effective execution of the financial inclusion agenda and establish a common understanding of the financial inclusion thrust, financial inclusion under NFIS II is defined as: “The effective and informed use of a wide range of quality, affordable and accessible financial services by all Zimbabweans, on a sustainable basis, provided in a fair and transparent manner through formal/regulated entities.”

The NFSI II vision is to, “Empower all Zimbabweans towards building, resilient and sustainable livelihoods through access and usage of appropriate, affordable, sustainable and quality formal financial services in line with the national development aspirations. Its mission is to facilitate access and usage of quality and affordable financial services by all Zimbabweans.

The Strategy recognizes the importance of empowering women, youth, Micro, Small and Medium Enterprises (MSMEs) and Entrepreneurship development; and Devolution are expected to underpin the successful implementation of the strategy.

The NFIS II also resonates well with the country`s National Development Strategy 1. The NFSI II document stated the outcomes of the NFSI II are aligned with the national development goals as articulated under NDSI. The NFIS II will focus on delivering the following outcomes:

Financing Deepening through increased uptake and usage of quality customer-centric financial products and innovative distribution channels to meet life cycle financial needs on a sustainable basis and improved livelihoods and financial services, and a combination of knowledge, skills, attitudes and confidence to make sound financial decisions that facilitate security, resiliency, participation in economic activities, and improved quality of life.

According to the document, financial deepening provides greater access and usage to a wide array of financial activities and products in an efficient manner which in turn boosts productivity and improves the resilience against shocks. The Strategy seeks to promote development of second generation of financial products to promote increased uptake and usage of financial services.

The document further states that MSMEs continue to be a key driver to economic development, employment creation and wealth creation. Knowledge of financial products and services, ability and confidence to make sound financial decisions, coupled with formalization, skills development, and a supportive legal and regulatory framework are key in unlocking the entrepreneurial skills that will facilitate new wealth creation in line with the objectives of the NDS.

This Strategy being implemented by the Ministry of Finance and Economic Development is key as it ensures and facilitates attainment of inclusive economic growth.

Under NFIS II, capacity building and development of business and technical skills of the entrepreneurs will be key in driving financial inclusion of the micro, small and medium enterprises. Formalization, an enabling regulatory environment and access to markets and working space remain key focal areas.

MSMEs are the backbone for economic growth contributing ZW$8.6 billion to (around 60%) of Gross Domestic Product (GDP).The MSMEs are contributing  towards wealth creation and reduction of poverty, and currently employing more than 1.7 million people, the majority of whom are women in rural areas.