Microfinance, Poverty Alleviation and Sustainability: Towards a New Micro-Finance Model for Zimbabwe

The main aim of this paper is to propose the development of a new microfinance model that can approximate sustainability in Zimbabwe. The secondary purpose is to find out whether the same model can be replicated in other developing countries. The paper adopted a mixed methodology. A crosssectional data collection method was preferred because data was collected during the time of high volatility in the country. Questionnaires, interview schedules were combined to collect data from villagers involved in microfinance programmes. Data were collected from 250 households in the Masvingo rural district area of Zimbabwe. The findings show that the two polar models are biased, hence the need for the ‘middle of the road approach’/‘hybrid model’ for the provision of microfinance services to the poor in order to achieve the twin objectives of poverty alleviation and sustainability. The paper is limited to a Masvingo district of Zimbabwe, thus replication could become a challenge. This article attempts to develop a ‘middle of the road’ model for microfinance in Zimbabwe. According to our knowledge, there is no study that has attempted to do the same

Conceptualizing Microfinance For Effective Smallholder Farming In Africa

Smallholder farmers in Africa desperately need pro-poor interventions to alleviate their poverty through self-sustenance. In Africa, poverty is more prevalent in rural areas, where the overwhelming majority (about 80%) of Africas population lives and about 72% are poor. Microfinance cannot have substantial impact on poverty until it significantly penetrates the rural areas where small-scale agricultural activities by smallholder farmers need financial support. This paper thus attempts to conceptualise microfinance for smallholder farming in Africa which is done from the integrated view as opposed to a minimalist view.The integrated view was selected because it focuses on the provision of credit facilities plus related follow-up services such as training, whilst the minimalist view is concerned about giving credit only. The paper relied on literature review and digestion to conceptualise microfinance as a strategy for boosting smallholder agricultural production. Many rural farmers have no access to the traditional financial system. Therefore, basic financial services are essential for the management of their productive endeavors. This paper argues that microfinance plays a pivotal role in the commercialisation, not only of smallholder farming activities but also the successful implementation of agricultural ideas. Microfinance is one way of helping farmers to sharpen their agricultural ideas so as to promote rural economic development.With this background it has become imperative to explore the commercialisation of rural agriculture so as to empower the farmers. The financial sector in most countries does not cater for rural finance because they require physical collateral security that rural people do not have. In this article, micro-finance is seen to be a useful intervention that can be employed to economically empower the agricultural sector

¿Es importante la financiación informal para las micro y pequeñas empresas en África?

Globally, micro and small businesses require finance to support their business activities. Most of them have low profits because of the lack of support from the formal financial system. Micro and small businesses in developing countries have a dire need for financing start-ups and existing business operations. The lack of support from the formal financial system and the government forces them to explore other financial support mechanisms, making it important to investigate alternative financial channels. This paper investigates whether informal finance matters for micro and small businesses. We used a systematic literature review to answer the predetermined research question. Thirty (30) primary studies were surveyed to establish the importance of informal finance for micro and small businesses. The findings show that informal finance is a workable alternative for micro and small businesses. It supports business start-ups, existing businesses and enhances business growth, business owners’ livelihoods and livelihoods in their communities. Informal finance models can be improved to work as small business promotion tools. The original value of the paper is based on the use of a systematic literature review to assess whether informal finance matters for micro and small businesses and connect theories with emerging themes. It further contributes to the debates on the importance of informal finance and contributes to future lines of research on informal finance.En todo el mundo, las microempresas y las pequeñas empresas necesitan financiación para apoyar sus actividades económicas. La mayoría de ellas obtienen escasos beneficios debido a la falta de apoyo del sistema financiero formal. Las microempresas y las pequeñas empresas de los países en desarrollo tienen una necesidad imperiosa de financiar la creación de empresas y las operaciones corrientes. La falta de apoyo del sistema financiero formal y del gobierno les obliga a explorar otros mecanismos de apoyo financiero, por lo que es importante investigar canales financieros alternativos. Este trabajo investiga si la financiación informal es importante para las micro y pequeñas empresas. Se utilizó una revisión sistemática de la literatura para responder a la pregunta que el título de este trabajo plantea. Se examinaron treinta (30) estudios primarios para determinar la importancia de la financiación informal para las microempresas y las pequeñas empresas. Los resultados muestran que la financiación informal es una alternativa viable para las micro y pequeñas empresas. Esta vía apoya la creación de nuevas empresas, a las empresas ya existentes y mejora el crecimiento empresarial, los medios de vida de los propietarios de las empresas y el bienestar de las comunidades más cercanas. Los modelos de financiación informal pueden mejorarse para que funcionen como herramientas de promoción de las pequeñas empresas. El valor original del presente documento se basa en el uso de una revisión bibliográfica sistemática para evaluar si la financiación informal es importante para las microempresas y las pequeñas empresas y conectar las teorías con los temas emergentes. Además, contribuye a los debates sobre la importancia de la financiación informal, a la vez que, aporta líneas de investigación futuras sobre la financiación informal

Innovative Rural Financing In Zimbabwe: A Case Of Cattle Banking

This study breaks new ground by looking at an innovative financial approach of livestock banking vis-à-vis rural finance. The purpose of this paper is to evaluate the validity and feasibility of ‘cattle banking’ as an alternative innovative financing strategy in Africa with specific reference to Zimbabwe. ‘Cattle banking’ has entered the debate on innovative financing for rural areas. In Zimbabwe, TN Bank (now Steward Bank) has taken the ‘bull by the horns’ through introducing the new strategy to farmers who are mostly rural. Cattle are very important assets in the rural areas despite the challenge of climate change and global warming that have direct negative effects on pastures. This is an exploratory paper that relies on extensive literature relating to ‘cattle banking’. The authors find that ‘cattle banking’ has the potential to assist farmers to open bank accounts using cattle, thus encouraging them to save their assets. Moreover ‘cattle banking’ promotes asset-building among farmers. Many farmers in the rural areas of Zimbabwe do not have bank accounts because of what they experienced during Zimbabwe’s “lost decade” (2000-2010) when bankers lost millions of dollars to the hyperinflation. This paper recommends that cattle banking should be developed as it has the potential to uplift the livelihoods of rural farmers. It is also seen as an innovative strategy to overcome rural finance challenges

What is the future of financial inclusion?

The purpose of this lecture is to explicate the future of financial inclusion with a focus on Africa. Understanding financial inclusion, its advantages, and its trajectory into the future sets a scene for future research and debates. Materials and methods: In preparing this lecture, I used systematic literature and bibliometric analysis complemented with field research done in two selected areas (Masvingo district in Zimbabwe and the Kirkwood area in the Eastern Cape, South Africa). Results/Findings: Results show that financial inclusion benefits poverty alleviation, job/employment creation, small business growth (through innovation and creativity), sustainability, closing inequality gaps, inclusive economic growth and development (local, national, regional, and global), closing gender gaps, and the promotion of digital finance. In other words, it creates opportunities for individuals, businesses, and economies in various ways. It also contributes to the attainment of sustainable development goals (SDGs). Globally, stakeholders such as governments, supranational organisations (the UN, the WB, the IMF, the G20) and development banks are working together to achieve financial inclusion. Alleviation or elimination of financial exclusion (FE) is the ultimate. Social implications: Financial inclusion promotes socio-economic transformation and livelihood enhancement. The unbanked, or the financially excluded, and the underbanked benefit from financial inclusion, thus allowing them access to financial services. Conclusions and recommendations: Extant literature and empirical research demonstrate the immense contribution of financial inclusion. It helps to defy the triple challenges of poverty, unemployment, and inequality. This lecture therefore recommends deliberate policy intentions by governments in developing countries to support financial inclusion to benefit the marginalised and promote the attainment of Sustainable Development Goals(SDGs). There is a need to digitise the financial systems for inclusivity. I argue that the future of financial inclusion is achieved not only by technology, but also by acceptance, behaviour, and collaboration/synergy, built around strong ecosystems. An underlying thesis is that financial inclusion benefits economies in many ways

What is the future of financial inclusion?

The purpose of this lecture is to explicate the future of financial inclusion with a focus on Africa. Understanding financial inclusion, its advantages, and its trajectory into the future sets a scene for future research and debates. Materials and methods: In preparing this lecture, I used systematic literature and bibliometric analysis complemented with field research done in two selected areas (Masvingo district in Zimbabwe and the Kirkwood area in the Eastern Cape, South Africa). Results/Findings: Results show that financial inclusion benefits poverty alleviation, job/employment creation, small business growth (through innovation and creativity), sustainability, closing inequality gaps, inclusive economic growth and development (local, national, regional, and global), closing gender gaps, and the promotion of digital finance. In other words, it creates opportunities for individuals, businesses, and economies in various ways. It also contributes to the attainment of sustainable development goals (SDGs). Globally, stakeholders such as governments, supranational organisations (the UN, the WB, the IMF, the G20) and development banks are working together to achieve financial inclusion. Alleviation or elimination of financial exclusion (FE) is the ultimate. Social implications: Financial inclusion promotes socio-economic transformation and livelihood enhancement. The unbanked, or the financially excluded, and the underbanked benefit from financial inclusion, thus allowing them access to financial services. Conclusions and recommendations: Extant literature and empirical research demonstrate the immense contribution of financial inclusion. It helps to defy the triple challenges of poverty, unemployment, and inequality. This lecture therefore recommends deliberate policy intentions by governments in developing countries to support financial inclusion to benefit the marginalised and promote the attainment of Sustainable Development Goals(SDGs). There is a need to digitise the financial systems for inclusivity. I argue that the future of financial inclusion is achieved not only by technology, but also by acceptance, behaviour, and collaboration/synergy, built around strong ecosystems. An underlying thesis is that financial inclusion benefits economies in many ways