The Financial Inclusion Revolution in Zimbabwe

By Shingirai Vambe

Harare, Zimbabwe, is abuzz with innovation, as a new wave of entrepreneurs tackles the financial exclusion of informal sector workers, unlocking opportunities for economic growth and empowerment

Meet Jane, a 35-year-old market vendor who has spent years struggling to make ends meet. She earns a meager income selling fresh produce, but has no access to formal banking or insurance services. That’s where Inclusive Financial Solutions (IFS), mobile network operators and banks come in pioneering institutions dedicated to providing tailored financial products to informal sector workers like Jane.

IFS has been at the forefront of innovation, offering micro-insurance and pension plans designed specifically for informal sector workers. But banks like POSB, with its wider reach and inclusive approach, is taking it a step further in digitizing and bringing the nation to vantage side.

The National Social Security of Zimbabwe, NSSA is proposing insurance schemes that are widely acceptable for informal traders, while financial institutions are bridging the gap between formal and informal financial systems.

The vision goes beyond individual success stories. By promoting financial inclusion, they aim to stimulate economic growth and reduce poverty nationwide. With the support of regulators like the Insurance and Pensions Commission (IPEC), they are helping to create a more inclusive financial ecosystem, one that recognizes the value of informal sector workers like Jane.

As IFS and financial institutions expand their reach, it’s clear that the financial inclusion revolution in Zimbabwe is only just beginning. With innovative solutions and a commitment to social impact, they are paving the way for a brighter financial future that leaves no one behind.

Zimbabwe’s informal sector, which accounts for a significant 75% of the country’s economic activity, remains largely unprotected by insurance. This is because most insurance products and services are designed to cater to the formal economy, leaving a substantial gap in coverage for informal sector workers and businesses not excluding those in rural areas.

Out of nine contingencies or branches of Social Security, NSSA is only providing 4 schemes which are, old age, invalidity, employment injury and survivor packages. Their wish is to include maternity, unemployment, medical care, family care and education and sickness.

Shepherd Muperi, Director Social Security said “Overcoming poverty is not a gesture of charity. It is an act of justice. It is the protection of a fundamental human right, the right to dignity and a decent life.”

The informal sector’s limited access to insurance exacerbates their already precarious financial situation, making them more susceptible to poverty and economic shocks. Without insurance, they must rely on makeshift savings and loan systems, which often prove inadequate in times of crisis.

The lack of insurance coverage for the informal sector hinders Zimbabwe’s economic growth and development. By excluding a significant portion of the population from financial protection, the country misses out on opportunities for economic expansion and poverty reduction.

Meanwhile, the IPEC is urging all insurance a d pensions companies to timeously settle claims as policy holders had to approach the commission intervention for settlement.