Only 3% of youths access bank credit: RBZ
LIVINGSTONE MARUFU
The Reserve Bank of Zimbabwe (RBZ) has raised concern over the limited access to credit by young people, revealing that only 3% of the country’s youth have obtained loans from formal financial institutions, largely because they lack acceptable collateral, Business Times can report.
Speaking at the launch of the Schools Monetary Policy Challenge (SMPC) last week, RBZ Deputy Governor Dr Jesimen Chipika said the central bank was working with banks and other financial institutions to remove barriers that continue to lock young entrepreneurs out of the credit market.
“Youth aged between 10 and 35 constitute 46.3% of Zimbabwe’s population, yet their access to credit remains very low at only 3%,” Chipika said.
She noted that while youth financial inclusion stands at 83%, driven mainly by digital financial services, their participation in formal lending remains disproportionately low.
According to the RBZ, more than 52% of young people still require financial education, while only 41% have access to banking products.
The findings have reinforced the central bank’s push to improve financial literacy through initiatives such as the ZWG10m Schools Monetary Policy Challenge, which seeks to equip students and teachers with a deeper understanding of monetary policy, personal finance and entrepreneurship.
Chipika said consultations conducted across the country had identified several obstacles preventing young people from accessing finance.
“The demand-side barriers include low levels of financial literacy, inadequate entrepreneurship skills, stringent account-opening requirements, low confidence in the financial sector, bureaucratic loan processing procedures and, most importantly, the lack of acceptable collateral security. We are addressing these challenges to enable young people to access financing for their projects,” she said.
The RBZ is engaging banks to simplify account-opening procedures for young customers and expand lending models that better accommodate youth-owned enterprises.
The central bank is also encouraging financial institutions to make greater use of Zimbabwe’s collateral registry, which allows borrowers to pledge movable assets, rather than traditional immovable property, as security for loans.
“We have the collateral registry system, which allows the use of movable collateral, and young people can take advantage of that because it is now recognised as acceptable security,” Chipika said.
As part of its broader financial inclusion agenda, the RBZ says its financial literacy outreach programmes have reached more than six million Zimbabweans.
Zimbabwe’s first National Financial Inclusion Strategy (2016-2020) sought to raise access to formal financial services from 69% in 2014 to at least 90% by 2020, while increasing the proportion of banked adults from 30% to at least 60%.
Lessons from that programme informed the current National Financial Inclusion Strategy (2022-2026), with authorities already developing a third phase aimed at deepening financial literacy and expanding access to affordable credit for marginalised groups, particularly the youth.
