adminKudzanai Gerede
FINANCIAL inclusion with a holistic approach of rural communities is critical to the country’s banking sector with the majority of the country’s population residing in the rural areas, Bankers’ Association of Zimbabwe president Mr Sam Malaba has said. More than 70 percent of the country’s population live in the rural areas and there are very few banks or none in other remote but productive rural communities whose deposits can have a positive impact in the banking and financial sector.
“The greatest question is, are we putting resources in the rural areas where 70 percent of the population live; are we putting resources in agriculture where 36 percent of our population derive their income from agriculture?
“That is a challenge at a macro-finance level which Government and other players in the sector should urgently deal with,” said Mr Malaba.
With the country having the majority of its population informally employed, agriculture linked activities have become the backbone of the rural economy and more resources need to be channelled towards the formalisation of these activities through financial inclusion to resuscitate a vibrant banking sector.
“The reason why most Zimbabweans are not banked is that most people do not have enough income to afford savings and the majority of the population don’t have access to banking infrastructure and this is also evident in the low insurance uptake,” he added.
Although statistics highlight that the level of financial inclusion is now high solely due to the introduction of mobile money in the past few years which has allowed rural folks to transact through mobile phones, banks are the main drivers of transactional and credit products and very few in the rural areas have access to banking infrastructure let alone hold a bank account.
Consumer Council of Zimbabwe official Mrs Rose Mpofu said the banking sector’s woes were not only inclined to the centralisation of banks in urban areas but having one of the highest interest rate charges in the region, in an economy with high rate of unemployment and a daunted banking past with reference to the Zimbabwean dollar era.
“When we look at the banking sector, people still have memories of their monies that disappeared in the Zim-dollar era, and some had saved all their lives for their retirement, so there is still need for redress if the public is to gain confidence in banking,” she said.
RBZ Governor Dr John Mangudya is on record stating that the country’s banking sector is fighting a war of perception and has since promised transparency and restoration of confidence in the sector.
Online Reporter