The impact of mobile money transfer services on financial deepening in Zimbabwe (2010 – 2017)

Abstract

Zimbabwe’s financial sector has experienced remarkable transformation from the present decade which has led banking and customer’s access to change from retail banking to mobile phone banking. These developments triggered this investigation on the impact of mobile money transfer services on financial deepening in Zimbabwe. The study used the Ordinary Least Squares technique with financial depth (M2/GDP) being the dependent variable while growth in mobile money agents, growth in subscribers, growth in value of transactions, growth in volume of transactions and growth in mobile money financial products being the predetermined variables. Quarterly time series data for the period 2010 to 2017 were obtained from Reserve Bank of Zimbabwe, Postal and Telecommunications Regulatory Authority of Zimbabwe and the World Bank. The results established that growth in value of transactions, growth in volume of transactions and the growth in financial products offered by mobile money service providers highly enhance financial depth in Zimbabwe. The results call for policy makers in Zimbabwe to critically address the mobile money concept by advising the government to offer incentives towards financial innovation and products development that will add on to mobile money transfer services financial products. Research and development has to be done on new financial products so as to enhance financial deepening. Government has to make it mandatory for mobile money networks to embark on interoperability (this is to enable subscribers from Ecocash to send money to other subscribers from Telecash or One wallet so as to increase volume and value of transactions). Apart from interoperability in increasing value and volume of transactions, Government should embark on bulk disbursement of salaries where employees receive part of their salaries through mobile money transfer platforms.