Abstract:
Since the Zimbabwean economy adopted the US dollar as a major currency in 2009, rural
communities have remained marginalized in terms of access to financial products and services.
The research study evaluates the use and adoption of plastic money by rural communities in
Zimbabwe. A descriptive research design was adopted to assess the use of plastic money by
rural financially active citizens in Masvingo Province. Data was collected from a sample of 300
respondents using a self-administered questionnaire and analyzed using selected econometric
computer packages. The research study established that the majority of rural communities in
Zimbabwe had no access to plastic money facilities and therefore transacted mainly using cash
and mobile money. This was largely due to lack of plastic money facilities among rural service
providers, lack of adequate knowledge on importance of plastic money, low income levels and
lack of confidence in the overall financial system. It was concluded that very few financial
institutions served the rural market, and those that, did relied on agent banking. In addition,
the majority of retail operators are importers who only accept cash as a means of settlement.
It was recommended that banks should market their products and services to rural markets
through awareness campaigns on the benefits to be drawn from adoption and use of plastic
money. The central bank through its monitoring and supervisory function should continue to
assess the extent to which banks and other financial institutions are serving the needs of rural
communities. Point of Sale (POS) transaction costs should be reduced further to allow low
income earners to transact even in smaller amounts without feeling the pinch, otherwise the
goals of the National Financial Inclusion Strategy will be unachievable by 2020.
