Financial Inclusion in Zimbabwe: Determinants, Challenges, and Opportunities

Financial inclusion is a highly topical issue for policymakers since inclusive finance is viewed as a channel of social and economic development. Therefore, this paper seeks to ascertain and examine the determinants, challenges, and opportunities for financial inclusion in Zimbabwe. The research is done by examining existing literature and estimating Logit and Probit models. This paper finds that, the major determinants of financial inclusion in Zimbabwe are; gender, age, education, income levels, employment status, the cost of financial services, account opening requirements, and level of trust in the financial system. Challenges to financial inclusion in Zimbabwe include; financial illiteracy, lack of formal identification documents, lack of trust in the financial system, fragile economy, rural poor and gender inequality, and high transaction costs of financial services. However, mobile money services such as Eco-cash, Tel-cash, and One-money have proved an opportunity for inclusive finance in Zimbabwe. Furthermore, the establishment of the women’s Bank of Zimbabwe is one of the strategies to enhance inclusive finance for women in Zimbabwe. The simplified KYC requirements for low-income groups and the financial inclusion strategy commissioned by the Reserve Bank of Zimbabwe are hoped to promote financial inclusion. This paper recommended that to make finance inclusive, the government should develop policies that target marginalized groups such as the elderly, rural population, low-income earners, females, and the unemployed. The government should also develop a strong consumer protection regulatory framework, promote financial literacy, reduce the transaction cost of financial services and encourage the use of accounts with simplified KYC requirements to ease documentation needs

Economic growth and foreign direct investment in Africa: the mediating role of state fragility and natural resources

Using data from 43 African countries from 2000-2018, the study employed the Dynamic System GMM approach to examine the moderating effect of state fragility and natural resources on the FDI–economic growth nexus. The study found that FDI does not affect Africa's economic growth directly or indirectly after interacting with FDI with state fragility and natural resources. The insignificant impact of FDI on economic growth in Africa may be because for FDI to promote economic growth, some necessary factors, such as institutional development and the state of the economy, must be developed to a certain level high enough for the effect to be experienced. Given that African countries are fragile with low levels of institutional development, the FDI-Growth nexus is insignificant. The study recommends that African countries establish stable economies and develop their institutions to benefit from FDI inflows

Characteristics, Determinants, Challenges and Performance of Self-employment among the Youth in Uganda

This study examined the characteristics, determinants, challenges and performance of self-employment among the youth in Uganda using the School-to-Work Transition survey data for 2015 collected by the Uganda Bureau of Statistics. We employed two analytical approaches: descriptive statistics and binary and multivariate probit models. We found that most employed youths are self–employed. The majority of the youth were poor and had acquired primary education or less. Econometric estimations indicate that self-employment is determined by age, the number of children, financial status, education, high-income motive and flexible work hours. Most youth started businesses with individual savings or family money but not bank loans. Most youth faced unique problems, but financial constraints followed by market competition were the main challenges faced by the self-employed youth. Self-employment is not lucrative, and 20.29% of self-employed youths do not make profits from their entrepreneurial efforts. Moreover, 78.83% of the self-employed youths live below the poverty line

Developing a Business Incubator Model for an Entrepreneurial University: The Case of Bindura University of Science Education

This paper provides an overview of the development of a Business Incubator Model at Bindura University of Science Education (BUSE) and its role and effectiveness in supporting the development of new enterprises with high growth potential. Successful development of the BUSE Business Incubation Unit involves; development of entrepreneurship programmes and courses, having enterprise development in place of student industrial attachment, offering business and financial advisory services, mentorship programmes, entrepreneurial research output and networking with funding organisations. The prospective benefits for the development of the Business Incubation Unit are; transformation of BUSE from a „„traditional university‟‟ into an „„entrepreneurial university‟‟ thus achieving the BUSE 2014-2018 strategic plan objective of developing a fully-fledged entrepreneurship department. In addition, BUSE Business Incubation Unit will generate third stream revenue for the university, assist in the eradication of unemployment and poverty through the creation of successful and sustainable enterprises, increase government tax revenue, and thus promote the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim-ASSET) objectives

De l’intérêt d’embaucher plus de femmes dans les autorités fiscales africaines : témoignage de l’administration fiscale ougandaise

Tax collection has historically – in Africa and elsewhere – been collected almost entirely by men, partly reflecting patterns of authority and privilege in society, and partly owing to the traditionally coercive and confrontational approaches used. The situation is changing, with women entering the profession in increasing numbers, in part because of changes in the ways in which taxes are collected.La perception des impôts a historiquement – en Afrique et ailleurs – été recueillie presque entièrement par des hommes, ce qui s’explique en partie par un reflet des schémas sociétaux de l’autorité et des privilèges, et en partie par l’utilisation d’approches traditionnellement coercitives et conflictuelles. La situation est en train de changer, avec l’entrée de plus en plus de femmes dans la profession, en partie à cause des changements dans la façon dont les taxes sont collectées. La perception des taxes est à présent moins susceptible d’impliquer des interactions en face à face et plus susceptibles d’utiliser des approches indirectes telles que l’auto-évaluation et les plates-formes en ligne qui minimisent les interactions physiques. Les changements dans le caractère et les compétences requises dans les postes de l’administration fiscale ainsi que les changements plus larges sur le marché du travail et dans les relations entre les sexes, contribuent globalement à l’augmentation de la présence des employées féminines dans les administrations fiscales au niveau mondial. Dans les administrations fiscales des pays de l’OCDE, les femmes représentent environ 60% des employés. Cependant, la situation en Afrique est en moyenne très différente. Le passage à une fiscalité indirecte et non coercitive est loin d’être acquis, et les hommes sont encore largement majoritaires au sein des autorités fiscales nationales, bien qu’il y ait de grosses variations selon les pays.DFIDBill and Melinda Gates Foundatio

Financial Development and Income Inequality: Does Inflation Matter?

Inflation reduces the ability of financial intermediaries to improve resource allocation. Therefore, this study examines whether the effect of financial development on income inequality ceases as the inflation rate rises. The study uses dynamic panel data of 60 countries over a period of 1980–2009 and applies a system GMM estimator. The results show that financial development reduces income inequality. Nevertheless, the gains from financial development are offset by inflation. As inflation becomes severe, financial development ceases to reduce income inequality. This is because high inflation levels intensify credit rationing through reduction and greater variability of real returns. Consequently, the financial sector makes few loans, resource allocation becomes inefficient, and intermediary activity declines with adverse implications for income inequality. The results are robust to different measures of financial development

The Impact of Political Instability on Inflation Volatility in Africa

This paper investigates whether political instability leads to volatile inflation using a panel of 49 African countries. The study uses novel measures of political instability, particularly the state failure index and state fragility index. In the field of political instability and inflation volatility, this is the first study to measure inflation volatility as the conditional variance of inflation estimated from GARCH (1, 1) model. Adopting the system-generalized method of moments estimator for linear dynamic panel models for the sample period 1985-2009, the study documents a positive statistically significant effect of political instability on inflation volatility

A Study on Growth, Inflation and Inequality

The thesis is a collection of three empirical essays on growth, inflation and income inequality. The first essay examines the relationship between inflation level, inflation volatility and economic growth for 92 countries for the period 1982 - 2007 using the system GMM estimator. By this approach I am able to deal with the problems of endogeneity and collinearity among the variables. The results suggest that both inflation level and volatility negatively affect economic growth. Surprisingly, their effect on economic growth is very small. Panel VAR approach further certifies these findings. The results also confirm that even in the absence of inflation volatility, inflation level reduces economic growth. The second essay investigates whether political instability leads to volatile inflation using a panel of 49 African countries and 35 countries from the rest of the world for the period 1985-2009. This study uses novel measures of political instability, particularly the state failure index and state fragility index, and a novel measure of inflation volatility constructed as the conditional variance of inflation estimated from the GARCH (1,1) model. Adopting the system-GMM estimator the study documents a significant positive effect of political instability on inflation volatility. This effect is more pronounced and robust in Africa than in the rest of the world. Chapter 4 examines the moderating effect of inflation on the financial development-income inequality nexus. Using a panel data of 60 countries over the period 1980-2009 and applying a two-step GMM estimator the study finds that financial development reduces income inequality. Nevertheless, the gains from financial development are offset by inflation. The results are robust to different measures of financial development, different estimators and sample sizes