6. The Role of Institutions in Promoting Financial Inclusion of MSMEs in Zimbabwe

Institutions play an important role in the delivery of financial products and services and are a vital component of the financial inclusion ecosystem. In Zimbabwe, the definition of financial inclusion is limited to access and use of financial products and services from formal institutions in the financial service sector such as insurance agents, mobile network operators, banks, microfinance institutions, remittance agents and fintech companies. Their oversight, regulation and survival are determined by the policy environment around them. The definition of inclusion, however, does not account for the informal operations which are taking place in Zimbabwe where 52% of micro, small, and medium enterprises (MSMEs) are informal and therefore look to other avenues for access to financial products and services. This chapter processes data from a nationwide survey of MSMEs as primary data and subsequently uses secondary sources to compile other informal institutions influencing the financial habits of MSMEs in Zimbabwe. The chapter outlines some of the barriers experienced by MSMEs when attempting to access products and services from formal sources. It further outlines the key players in financial service provision and their roles noting that other institutions (social and cultural) should additionally be considered in future efforts to understand the state of inclusion and promote financial equity in Zimbabwe.