Financial Inclusion and Bank Stability in Zimbabwe

Sakarombe, Upenyu (2018): Financial Inclusion and Bank Stability in Zimbabwe. Published in: International Journal of Academic Research in Economics and Management Sciences , Vol. 7, No. 4 (31 December 2018): pp. 121-138.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Financial Inclusion, Bank stability
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies; G - Financial Economics > G2 - Financial Institutions and Services; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation

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