Urban Financial Exclusion in Zimbabwe: An Exploratory Study

Norman Marime, Loverage Chakazamba


The study sought to explorethe major reasons as to why the urban poor are financially excluded despite theirproximity to major financial institutions. To achieve the overall aims of the study, an exploratory research designwas used as it was deemed necessary to provide the how and why things happen.  Asample of 200 footpath fruit and vegetables vendors, 50 pensioners, 100 students,10 Reserve Bank of Zimbabwe Official, 10 banks, 100 small scale farmers, 100 MFIs,200 small to medium enterprises (SMEs), was used. The study was carried out in thefive major cities of Zimbabwe. These respondents provided information on the majorreasons for financial exclusion in urban areas. Most of the data was gathered usinga questionnaire as well as telephone interviews. Data was captured in SPSS and presentedin the form of tables while descriptive statistics were computed and used in theinterpretation of the findings. The findings showed that self-exclusion, financialliteracy, lack of a saving culture, structural changes in the labour market, highbank charges, and stringent account opening requirements, risk assessment criteriaand low disposable income were the major reasons for the poor urbanites to be financiallyexcluded. However, the research revealed that service providers cited demand andsocietal factors as reasons for financial exclusion while the urban poor gave demandand supply factors as major reasons. Evidence showed that there is a perceptiongap between the service providers and the poor urbanites. Thus the research confirmedthat financial illiteracy and self-exclusion as well as the low levels of disposableincome play a major role financial exclusion in Zimbabwe. The study recommendedthat government fund not for profit organizations that conduct financial educationprogrammes and commission researches to investigate causes of financial exclusion.The research further recommends that the RBZ facilitate opening of bank accountsby low income groups.Keywords: Financial Exclusion, Financial Inclusion

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