An investigation of determinants of financial inclusion in Zimbabwe: A demand-side perspective.

Abstract

Developing countries especially in Sub-Saharan Africa including Zimbabwe face low levels of financial inclusion. The purpose of this study was to establish the demand-side determinants of financial inclusion in Zimbabwe. The study used 2014 FinScope Consumer Survey cross sectional data obtained from FinMark Trust of South Africa. The logit regression model was employed to estimate the factors that influence the inclusion of adult individuals and household heads into the formal financial system based on responses from a sample of 1 641 adult individuals and household heads across Zimbabwe. Respondents were from across different wealth classes, occupational backgrounds, geographical locations, age, generation and gender. Distance to the nearest formal financial service provider, education, income, documentation requirements by financial service providers, trust in banks, internet connectivity and financial literacy were found to be determinants of financial inclusion. Age and sex were found not to influence financial inclusion. The implications of the study findings point to the need to promulgate and implement policies that increase consumer incomes, level of education, trust in banks, internet connectivity and financial literacy. Policies that reduce distance travelled by consumers to banks and other formal financial service providers are important in driving financial inclusion by reducing travelling time and costs by consumers.