… as Central Bank targets youth credit gap
The Reserve Bank of Zimbabwe’s (RBZ) financial literacy outreach programmes has reached more than six million Zimbabweans, as the Central Bank intensifies efforts to improve financial inclusion and expand access to affordable credit, particularly for young people.
Speaking at the launch of the Schools Monetary Policy Challenge (SMPC), recently, RBZ Deputy Governor, Dr Jesimen Chipika, said the financial education initiatives were equipping citizens with knowledge on personal finance.
“The financial education initiatives are proving to be very beneficial as they are equipping citizens with knowledge on personal finance, entrepreneurship and monetary policy while addressing barriers that continue to limit access to formal financial services,” he said.
The outreach comes as the Central Bank revealed that despite accounting for 46.3 percent of Zimbabwe’s population, only three percent of young people aged between 10 and 35 have accessed loans from formal financial institutions, largely due to a lack of acceptable collateral.
“Youth aged between 10 and 35 constitute 46.3% of Zimbabwe’s population, yet their access to credit remains very low at only 3%,” said Dr Chipika.
She said youth financial inclusion currently stands at 83%, driven mainly by digital financial services, but participation in formal lending remains disproportionately low.
According to the RBZ, more than 52% of young people still require financial education, while only 41% have access to banking products.
Dr Chipika said nationwide consultations had identified several factors limiting youth access to finance.
“The demand-side barriers include low levels of financial literacy, inadequate entrepreneurship skills, stringent account-opening requirements, low confidence in the financial sector, bureaucratic loan processing procedures and, most importantly, the lack of acceptable collateral security. We are addressing these challenges to enable young people to access financing for their projects,” she said.
The RBZ is working with banks and other financial institutions to simplify account-opening procedures for young customers and promote lending models better suited to youth-owned enterprises.
The central bank is also encouraging wider use of Zimbabwe’s collateral registry, which enables borrowers to secure loans using movable assets instead of traditional immovable property.
“We have the collateral registry system, which allows the use of movable collateral, and young people can take advantage of that because it is now recognised as acceptable security,” Dr Chipika said.
Zimbabwe’s first National Financial Inclusion Strategy (2016-2020) sought to increase access to formal financial services from 69% in 2014 to at least 90% by 2020, while raising the proportion of banked adults from 30% to at least 60%.
Lessons from that programme informed the current National Financial Inclusion Strategy (2022-2026), with authorities already working on a third phase aimed at strengthening financial literacy and broadening access to affordable credit for underserved groups, particularly young people.
