RBZ bets on financial inclusion to drive growth

LIVINGSTONE MARUFU

Financial inclusion plays a pivotal role in the creation of an inclusive economy where all Zimbabweans have a role to play thereby reducing poverty and the gap between the rich and the poor, a top banker has said.

The development comes at a time when the informal economy remained the mainstay of the economy contributing 60% of the Gross Domestic Product.

Speaking at the launch of the National Financial Inclusion Strategy (NFIS) II, the Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said the development of the strategy involved extensive collaborative processes in significant consultation among the stakeholders.

“Financial inclusion remains the key priority of the bank to foster sustainable and broad-based growth that promotes shared prosperity and opportunities.

“Thus financial inclusion plays a pivotal role in the creation of an inclusive economy where all economically active Zimbabweans have an opportunity to create wealth, reduce poverty and build resilience towards unexpected shocks as well as participate in the economic development of the country,” Mangudya said.

He said the global trends show a strong focus on central banks in the development of national financial inclusion as a key driver of sustained and balanced economic development which helps to reduce inequality and poverty.

He said Monday’s launch was a testimony of the financial inclusion journey that that the bank has started under the NFIS1 which was launched in 2016 ending 2020.

Mangudya thanked the stakeholders that have contributed to the development of the National Financial Inclusion Strategy II.

“Let me highlight that the journey travelled during the implementation period of NFS1 had its challenges amid unexpected shocks which included the Covid-19 pandemic and we managed to stay on the course in the achievement of our goal of an inclusive economy in Zimbabwe.

“Covid-19 has made inclusivity more urgent, we witnessed the lack of resilience affected everyone and everywhere but was more pronounced in women, micro and small to medium enterprises, smallholder farmers and the poor,” he said.

The RBZ chief said upon the expiry of NFIS1, two Fin scope surveys were commissioned to evaluate progress made following the end of the first strategy into facilitating the development of an evidence-based NFIS II.

The central bank carried out Finscope and MSME surveys to assess the effectiveness of the NFIS1.

“It is pleasing that Zimbabwe recorded remarkable progress on the access dimension which continues to play a key role in financial inclusion of the vulnerable and the underserved groups like women youth, MSMEs, people with disabilities rural communities and smallholder farmers, elderly and pensioners.

“Financial inclusion contributes to financial stability by diversifying financial access to the ignored like the unbanked and underbanked individuals and small businesses,” Mangudya said.

He said financial inclusion presents a great opportunity to develop a stable and sustainable financial services sector.

During the NFIS1 banking products went up.

NFIS1 was about access but the second one seeks to expand, consolidate the usage of quality financial services.

The central bank is revamping what it achieved in the NFIS1 on a sustainable basis which fosters economic development.