A 18 month programme carried out in 8 rural districts in Zimbabwe to study the relevant, appropriate and affordable financial services that result in increased agriculture productivity, incomes, improved food & nutrition security and reduction of poverty has revealed more needs to be done to ensure financial inclusivity among the rural population.
The programme carried out by LFSPZim, SNV and Steward Bank revealed that rural finance needs time as it includes behavioral change and more innovate products are needed for the space.
In 2016 the Reserve Bank of Zimbabwe (RBZ) launched the national Financial Inclusion strategy which was primarily focused on the rural population, smallholder farmers, women and youths. About 70 percent of Zimbabwe’s populations reside in the countryside.
The strategy envisioned increasing banking services to 90 percent of the population by 2020 from the 30 percent recorded in 2016.
During the 18th month period the programme was able to mobilize savings of up to US$2.2m from sixty thousand rural clients on the Ecocash platform and Steward Bank’s isave account.
Farmers were happy to open the isave account as the requirements are less stringent and easily available compared to other banking products.
Over US$2m was extended to two thousand borrowers and USAID provided a guarantee facility to cover 50percent of the loan in the event of default.
A staggering US$9.5m was transacted in the districts through the 298 POS machines that were set up while over 180 thousand farmers accessed mobile money services.
Another 30 thousand funeral policies were accessed by farmers and the rural client.
The programme noted that financial institutions must develop pro-poor products and services; also both financial institutions and mobile network operators need strong implementation links and heighten mobile literacy among the rural folk.
Access to financial services enables the poorest and most vulnerable groups in society to step out of poverty and reduce inequalities.
Financial inclusion not only helps individuals and families, but collectively it develops entire communities and can help drive economic growth
Once the rural community is educated on the advantages of embracing new technologies to access financial products/services such as mobile banking uptake is rapid the study revealed.
Other studies by the World Bank (WB) note that Financial Inclusion in Agriculture, facilitates the process of Social and Economic development; promoting poverty reduction, economic growth, greater democracy and; environmental and institutional sustainability.