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Financial Inclusion and Bank Stability in Zimbabwe

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  • Sakarombe, Upenyu

Abstract

The relevance of financial inclusion is increasing rapidly as it is becoming a policy issue especially in developing countries. However, financial inclusion can cause stability or fragility in the financial sector. The nexus between the two has to be clarified before fostering major strategies of financial inclusion. This study employed a system Generalised Method of Moments (GMM) to investigate this relationship. The results of this study suggest that financial inclusion can increase stability in the banking sector. This entails a positive, holistic approach towards implementation of agenda 2016-2020. In essence, financial inclusion is designed to bring about capacity to the economically and socially excluded population by creating equal opportunities. In order to achieve a sustainable financial inclusion framework there is need for viable business models (such as mobile money services), efficient, cheap and non-complicated technology contained in an appropriate regulatory approach by the Central Bank.

Suggested Citation

  • Sakarombe, Upenyu, 2018. "Financial Inclusion and Bank Stability in Zimbabwe," MPRA Paper 102465, University Library of Munich, Germany, revised 17 Nov 2018.
    • Handle: RePEc:pra:mprapa:102465
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G2 - Financial Economics - - Financial Institutions and Services
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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