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Labour Market Shocks and Household Resilience: The Mediating Role of Loan Delinquency in Botswana and Zimbabwe

Author

Listed:
  • Costa Musandipa
  • Peter Nkala
  • Noble Malunguza
  • Edson Mbedzi

    (National University of Science and Technology, Zimbabwe)

Abstract

This study investigates how loan delinquency mediates the link between unemployment and household financial well-being (HFWB) in Botswana and Zimbabwe. Using comparative mediation analysis and macroeconomic data, results show unemployment negatively affects HFWB in both countries. In Botswana, delinquency partly mediates this relationship, though indirect effects are weak. In Zimbabwe, mediation is absent, with statistically weak paths. These differences highlight structural contrasts in informal sector roles, financial markets and coping strategies. The study donates to labour-finance literature and offers insights for policy aimed at consolidation household resilience.

Suggested Citation

  • Costa Musandipa & Peter Nkala & Noble Malunguza & Edson Mbedzi, 2025. "Labour Market Shocks and Household Resilience: The Mediating Role of Loan Delinquency in Botswana and Zimbabwe," The African Finance Journal, Africagrowth Institute, vol. 27(2), pages 41-51.
    • Handle: RePEc:afj:journl:v:27:y:2025:i:2:p:41-51
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    File URL: https://journals.co.za/doi/abs/10.10520/ejc-finj_v27_n2_a3
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    Keywords

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    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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