Factors That Matter for Financial Inclusion: Evidence from Sub-Sharan Africa - The Zimbabwe Case

Authors

  • David Mhlanga School of Business and Economics, University of Johannesburg, PO Box 524, Auckland Park, 2006, South Africa

DOI:

https://doi.org/10.36941/ajis-2021-0152

Keywords:

agricultural sector, factors, financial inclusion, Zimbabwe

Abstract

The study intended to investigate the factors that are important in influencing the financial inclusion of smallholder farming households in Sub-Saharan Africa with a specific focus on Zimbabwe. Motivated by the fact that there is an increase in the evidence of the importance of financial inclusion in fighting poverty and the fact that by merely having a bank account, financial inclusion cannot be guaranteed, the study went further to interrogate factors that influence smallholder farmers to have a transaction account, to borrow and to have insurance. Since the dependent variable of financial inclusion had more than two categories, with three unordered categories, transaction account, savings/credit account, and insurance, the multinomial logistic regression was used to estimate the determinants of financial inclusion from these three categories of the dependent variable. The multinomial logit model results, with insurance as the reference category, indicated that the size of the household, transaction costs, gender and agricultural extension service were the factors influencing the demand for a household to open a transaction account. On the other hand, off-farm income and age of the household were the only two factors significantly influencing households to borrow. Therefore, it is imperative for, the government of Zimbabwe to come up with more policies that encourage farmers to participate in the formal financial market as financial inclusion can help to fight poverty and the general developments of societies.

 

Received: 28 April 2021 / Accepted: 31 August 2021 / Published: 5 November 2021

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Published

05-11-2021

Issue

Section

Research Articles

How to Cite

Factors That Matter for Financial Inclusion: Evidence from Sub-Sharan Africa - The Zimbabwe Case. (2021). Academic Journal of Interdisciplinary Studies, 10(6), 48. https://doi.org/10.36941/ajis-2021-0152