THE Reserve Bank has approved the adoption of agent banking by financial institutions as part of efforts to increase access to financial services, governor Dr John Mangudya said.
Services that will be offered by the banks include cash deposits, withdrawals and loans.
The lack of extensive bank networks has resulted in many Zimbabweans, particularly those in the rural and marginalised areas failing to access valuable financial products. The model will help banks reduce the costs associated with the brick and mortar model.
With 67 percent of Zimbabweans living in the rural areas, there is huge scope for financial institutions to increase their presence in the traditionally marginalised market.
“Increasingly, agent banking and e-banking are being recognised as efficient and cost effective delivery channels of financial products and services,” said Dr Mangudya in his Monetary Policy Statement.
“Against this background, all banking institutions are required to explore the agent banking model.”
Dr Mangudya said the central bank would issue detailed guidelines to govern the establishment and operations of bank agents by the end of next month.
The central bank governor said the model will promote financial inclusion as it will enable banks to roll out its services through networks of post offices, microfinance institutions, registered cooperative societies, registered companies, agents of mobile network operators and offices of rural and urban local Government institutions.
The banks can also use educated individuals capable of handling IT based financial services, agents of insurance firms, pharmacies, chain shops and fuel or gas stations.
Analysts welcomed the model saying it will increase accessibility of financial services to the previously marginalised and help financial institutions tap new customers and reduce costs.
“This is one of the most appropriate way of promoting financial inclusion,” said one analyst.
“The capital outlay for rolling out the services is very low and no bank would want to be left out. Very we may see all corners of the country accessing financial services.”
Analysts said with Zimbabwe working on Movable Property Security Interests Bill that will enable small and medium enterprises as well as communal farmers to borrow using movable property security, bring the financial services on their doorstep is commendable.
However, Dr Mangudya said lack of financial literacy would be a major impediment to financial inclusion.
As such, a financial literacy framework will be issued by 30 June to ensure that various consumers are empowered to responsibly interface with financial institutions.
In terms of the framework banking institutions will be required to develop and implement financial literacy programmes for the various segments of their customers.
In order to ensure that financial literacy is inculcated at an early stage, banking institutions are required to open accounts for school children with special features including no minimum balance, attractive interest rates and no charges, said Dr Mangudya.
The RBZ will conduct national financial literacy programmes mainly targeted at special groups such as school-going children, MSME entrepreneurs, women entrepreneurs, youth and vulnerable adults such as pensioners and less literate adults.
“The availability of information is critical in facilitating inclusion of all Zimbabweans in economic activities particularly those in remote areas,” said Dr Mangudya.
“In this regard, information centres will be established in the various districts of the country.
“Information and services that will be accessible from the centres include remittances, financial information, and information on health, agriculture and markets.
“This will have far reaching implications on productivity in agriculture, employment creation, rural sector development and financial inclusion. The central bank governor said the information centres may also be used by banks as agents in their banking operations.’’