Examining the impact of mobile banking, digital financial services, and fintechs on financial inclusion in rural Zimbabwe

Abstract

Financial inclusion is critical for equitable growth and poverty alleviation. However, 70% of rural Zimbabweans lack access to formal financial services. While digital financial services (DFS) innovations like mobile money and fintechs can promote inclusion, rural adoption lags amid infrastructure, literacy and product barriers. This explanatory mixed methods study examined how varying DFS models have impacted financial access and capabilities amongst 900 marginalized rural adults across 6 regions of Zimbabwe. A survey found 62.8% of respondents use mobile money, primarily for convenient peer-to-peer transfers. However, only 15.2% utilize services weekly, with lower usage amongst elderly, less educated and remote groups, signalling uneven disruption. Fintech adoption was just 8.9% amid ecosystem constraints. Users reported DFS has moderately enhanced financial capabilities for investment, resilience and urban remittances, but suboptimal infrastructure, fees, design misalignment, and trust gaps were pronounced barriers even for dominant platforms. In-depth interviews highlighted key roles of localized agent networks, infrastructure investments, simplified interfaces, vernacular marketing, tailored pricing and expanded use-cases driving adoption. But complex menus, intermittent connectivity, fraud fears and capability divides persist, constraining sustainable broad-based usage and nuanced financial behaviours essential for meaningful inclusion. Variations across locales and segments mirror demographic asymmetries.Overall, findings revealed accelerated but shallow mobile money diffusion, highlighting specialized barriers excluding vulnerable groups from harnessing digital financial innovation equitably. Concerted strategies addressing fragmentation risks are indispensable to fulfil resilience and empowerment promises under financial inclusion policies for the rural poor. Tailored infrastructure development, financial literacy, user-centric design and decentralized interoperability can progress an unevenly disrupted market from narrow primitive digitization towards more meaningful financial capabilities benefiting marginalized communities. But conscious policy efforts emphasizing the vulnerable remain pivotal amid transition. Localized coordination, affordability measures and digital upskilling fostering sustainable adoption provide pathways aligning market shaping to public interest financial inclusion goals.