The FinScope consumer survey was done by a South African company —FinMark Trust — in conjunction with Zimbabwe’s Finance ministry through the Zimbabwe National Statistics Agency (Zimstat) from July 2011 to November 2011.
The survey was undertaken after government recognised the role played by the financial sector in facilitating economic growth. The results will be used to develop policies that generate sustainable and inclusive growth and development.
According to the survey’s results, 38% of Zimbabweans were formally served, while 40% of Zimbabweans were financially excluded, using neither formal nor informal products or services to manage their finances, but mainly relying on family or friends.
FinMark MD Maya Makanjee said that financial exclusion was particularly high in the rural areas, possibly due to limited access to banks and formal salaried employment.
There were significant differences between rural and urban levels of financial inclusion. While every second Zimbabwean in urban areas was banked, only 12% of adults in rural areas had commercial banking products.
“The current banking products seem to focus on adults who receive a regular salary. From a supply-side perspective, formal institutions are likely to target these individuals. From a demand-side perspective, those who receive salaries and wages are likely to need a formal product for the purpose of processing their salaries and wages,” Makanji noted.
About 31% of Zimbabweans did not put money aside, while those who saved were most likely to do that from home. It was observed that people mainly saved to be able to pay for living expenses during hard times, as well as for school fees and emergencies.
The results of the survey also showed that 69% of the population was not insured. In terms of connectivity, 85% of the population had access to a cellphone, while only 16% had access to internet. Around 5% had a landline at home, while 4% had access to a public phone.
Reserve Bank of Zimbabwe governor Gideon Gono said the level of financial inclusion — the proportion of the population using financial products and services — both formal and informal — was very low as shown by the results of the survey and there was need for the country to start offering virtual banking.
He said this could be made possible through the mobile banking platform. Gono said the central bank had given approval to 18 of the 26 financial institutions to partner with any of the three profile networks to offer cellphone banking.
“There is massive opportunity out there for banks to reach all communities,” said Gono, adding that there was need for fiscal incentives in order to encourage banks to grow virtual banking.
Overall, he said, the sector needed to make it possible for customers to secure loans. He noted the efforts that were already underway in microfinance, where there was a wholesale fund for capacity building in the microfinance sub-sector.
Money from farming and fishing was the main source of income for Zimbabweans at 29%, while every fourth Zimbabwean (25%) relied on money from others (household member or remittance) and only 18% received a regular salary.
According to the survey, 80% of the adult population earned less than US$200 per month (including 17% who did not have an income at all).