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Measuring Financial Inclusion and its Determinants among the Smallholder Farmers in Zimbabwe: An Empirical Study

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  • David Mhlanga

    (University of Johannesburg, South Africa)

  • Steven Henry Dunga

    (North-West University, South Africa)

Abstract

The study sought to assess the levels of financial inclusion among the smallholder farmers and to investigate its determinants among the same. The study employed a household measure to measure the level of financial inclusion and multiple regression to assess the determinants of financial inclusion. The results indicated that the level of financial inclusion among the smallholder farmers was low because the percentage of households who were actively participating in the formal financial system was below 27 per cent below 50 per cent. The investigation on the driving factors of financial inclusion indicated that off-farm income, education level, distance, financial literacy and age of the household were the significant variables in explaining the determinants of financial inclusion among the smallholder farmers in Manicaland Province of Zimbabwe. Therefore, the study discovered that it is important for the government of Zimbabwe and financial institutions to form partnerships to come up with policies that ensure that smallholder farmers are included in the formal financial market and these policies should motivate households to use the formal financial services. Also, the crafted should strive to remove all the barriers to financial inclusion among the smallholder farmers. For instance, looking at farmers, many farmers are finding it difficult to access loans due to lack of collateral security, so banks need to come up with services and products that are tailor-made for the smallholder farmers especially on credit, services that allow smallholder farmers to borrow.

Suggested Citation

  • David Mhlanga & Steven Henry Dunga, 2020. "Measuring Financial Inclusion and its Determinants among the Smallholder Farmers in Zimbabwe: An Empirical Study," Eurasian Journal of Business and Management, Eurasian Publications, vol. 8(3), pages 266-281.
    • Handle: RePEc:ejn:ejbmjr:v:8:y:2020:i:3:p:266-281
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    2. Varaidzo Denhere & David Mhlanga, 2021. "The Use of Surrogate Currency to Address Liquidity Crisis: The Zimbabwean Experience," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 9(3), pages 159-169.
    3. Ali Raza & Guangji Tong & Vasilii Erokhin & Alexey Bobryshev & Lyubov Chaykovskaya & Natalya Malinovskaya, 2023. "Sustaining Performance of Wheat–Rice Farms in Pakistan: The Effects of Financial Literacy and Financial Inclusion," Sustainability, MDPI, vol. 15(9), pages 1-19, April.

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