Staff Reporter
Zimbabwe’s financial services sector is experiencing a notable boost in investment, driven by an 18 percent increase in diaspora remittances during the first quarter of the year.
These remittances have surged to over US$490 million, up from US$420 million during the same period last year.
In an exclusive interview, economic analyst, Marlon Gwadu, expressed optimism that the influx of capital from increased diaspora remittances will significantly enhance Zimbabwe’s economy, aligning perfectly with the Government’s growth targets for the Second Republic.
“Remittances are a critical source of foreign currency for Zimbabwe. This influx of capital is being deposited into banks and mobile money platforms, providing the much-needed liquidity for financial institutions to lend to businesses and individuals,” said Gwadu.
Gwadu further highlighted that this surge in foreign currency is expected to provide much-needed liquidity for financial institutions, thereby stimulating economic activity and fostering growth across various sectors.
“The increased liquidity allows banks to offer a wider range of financial products, including loans for entrepreneurs, mortgages, and investment opportunities. This, in turn, stimulates economic activity as businesses expand, new ventures are created, and consumers have greater access to credit,” explained Gwadu.
Supporting this view, economic analyst, Stevenson Dlamini, noted that the influx of cash is driving a number of positive developments.
“Banks are seeing an increase in deposit accounts as recipients of remittances look for secure places to save their money. Microfinance institutions are also benefiting, as remittance recipients use the funds to invest in small businesses and income-generating activities,” said Dlamini.
Additionally, Dlamini also highlighted the impact of Government policy changes aimed at liberalizing the financial sector and promoting financial inclusion.
“It has played a significant role, and this is also impacted by the policy changes by the Government to liberalize that sector and give rise to the growth of these small to medium scale enterprises that offer these remittances.
“It is also evidence of the Government’s drive towards financial inclusion, which is one of the mandates or objectives of the Central Bank. All these have given rise to the growth in the financial sector and remittances,” Dlamini stated.
Furthermore, economic analyst, Batsirai Matsika, reiterated that financial services companies are increasingly offering innovative products and services to meet the evolving needs of Zimbabweans.
“Key to this development of remittances is financial inclusion. Remittances make use mostly of the fintech space that is also accelerated, and in that way, most of the traditionally unbanked and underbanked societies have managed to access finances through these services,” said Matsika.
The additional disposable income from remittances translates to increased consumer spending, stimulating various sectors of the economy.
This increased efficiency and accessibility are driving financial inclusion, which is crucial for the development of local economies, particularly in previously underserved areas.
