MPS prioritises financial inclusion for marginalised groups

THE civil society has applauded the 2024 Monetary Policy Statement (MPS) for paying special attention to financial inclusion of the marginalised including people with disabilities (PWD).

In his MPS released last week, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mushayavanhu highlighted how financial inclusion remains a key priority area that facilitates positive wealth creation and a key driver to sustainable and inclusive economic development towards the country’s 2030 Vision of an “Upper Middle- Income Economy” and leaving no one and no place behind.

Despite this, there has been exclusion of marginalised groups such as those in remote rural area, women and youth and people living with disabilities. Issues such as limited access to formal financial services, lack of education and infrastructure have limited their financial literacy and inclusion, which the National Financial Inclusion Strategy seeks to address.

“For a long time, PWDs have faced limited access to financial services.

“It is commendable that the 2024 MPS set out initiatives to address this anomaly and align with regional and global trends,” said civil society organisation Zimbabwe Coalition on Debt and Development (ZIMCODD).

According to the 2024 MPS, banking institutions and microfinance institutions are now required to facilitate the PWDs’ access to and usage of financial services through appropriate infrastructure, both physical and information communication technology.

“This will go a long way in ensuring inclusive economic growth and development in line with Vision 2030 of leaving no one and no place behind,” said ZIMCODD.

The National Financial Inclusion Strategy (NFIS) II is meant to promote increased usage of financial services.

Low levels of financial literacy, including digital financial literacy, have contributed to lower uptake and usage of financial services.

“In this regard, and as part of the implementation of NFIS II, there is increased focus on financial literacy with the view to facilitate acquisition of knowledge and skills that promote responsible financial behaviour and enables consumers to make informed financial decisions,” reads part of the 2024 MPS.

In line with initiatives to boost literacy and inclusion, the apex bank, in collaboration with other stakeholders, is conducting financial literacy programs on various platforms including, schools, women groups, churches, businesspeople forums, and communities in the rural areas.

Further, the bank has also embarked on financial inclusion campaigns and community engagements across the country’s provinces through various platforms including the National Development Strategy 1 programmes spearheaded by the Ministry of Finance, Economic Development and Investment Promotion, and sensitisation outreach programs on consumer rights and digital financial services, with Postal Telecommunication Regulatory Authority of Zimbabwe (POTRAZ), Consumer Council of Zimbabwe and Consumer Protection Commission of Zimbabwe.

With implementation of the programmes, there have been some improvements on some financial inclusion indicators.

According to the RBZ, access to credit improved during the year ended December 31, 2023 as shown by the significant increase in the real value of loans to women, which registered a 90,5 percent increase from $378,71 billion as at September 30, 2023, to $721,43 billion as at December 31, 2023.

The bank attributed the increase partly to the operationalisation of the collateral registry system which facilitates the usage of moveable assets particularly by women who previously lacked collateral to secure funding from financial institutions.

As at December 31, 2023, loans to women accounted for 7,76 percent of total banking sector loans, up from 4,48 percent in the previous quarter. In addition, real value of loans to MSMEs and youth increased from $326,97 billion and $278,49 billion as at September 30, 2023, to $461,39 billion and $292,85 billion as at 31 December 2023, respectively.

Statistics from the central bank also show the proportion of loans to MSMEs compared to total banking sector loans increased from 3,87 percent to 4,96 percent, while the proportion of loans to youth compared to total banking sector loans marginally declined from 3,29 percent to 3,15 percent for the same period.