Policy implications and mobile money regulatory approaches to promote financial inclusion of the poor in Zimbabwe after the COVID-19 pandemic*

• Jurisdiction: South Africa
• Date: 01 June 2023
• Pages: 241-258
• Author: Howard Chitimira,Elfas Torerai
• Published date: 01 June 2023
• DOI: 10.17159/2225-7160/2023/v56a17

Financial inclusion of the poor in Zimbabwe after the COVID-19 pandemic 241

Policy implications and mobile money

regulatory approaches to promote financial

inclusion of the poor in Zimbabwe after the

COVID-19 pandemic*

Howard Chitimira

LLB (Cum Laude) LLM LLD

Research Professor and Professor of Securities and Financial Markets Law, Faculty

of Law, North West University

Elfas Torerai

BSc LLB LLM LLD

Postdoctoral Research Fellow, Faculty of Law, North West University

SUMMARY

The increased usage of digital financial products and financial services

such as mobile money brought various challenges and opportunities in

Zimbabwe during the coronavirus (COVID-19) pandemic. This has also

increased the responsibilities of the regulatory authorities in the

Zimbabwean financial sector. The financial regulators were inadequately

prepared for the regulatory demands of financial technology (fintech)

products in Zimbabwe. For instance, they struggled to cope with the

increased responsibilities of overseeing mobile money operators and have

adequate resources to efficiently monitor and manage such operators to

ensure compliance with the relevant laws. Most Zimbabwean financial

regulators did not have sufficient resources to employ persons with the

relevant skil ls and exper tise to fulf il their responsibilities. Despite this, the

widespread use of mobile money has considerably improved the financial

inclusion of the poor and previously unbanked persons, particularly during

the COVID-19 pandemic in Zimbabwe. Consequently, various policy

implications and mobile money regulatory approaches that were

considered by policymakers during and after the COVID-19 pandemic in

Zimbabwe in a bid to provide adequate supervision of mobile money

operators and related digital financial services to curb the financial

exclusion of the poor and unbanked persons are investigated. It is against

this background that this article discusses the challenges, policy

implications, and flaws affecting the adoption of viable mobile money

regulatory approaches to promote financial inclusion of the poor in

Zimbabwe after the COVID-19 pandemic.

Keyword s: Risk-based approach, digital financial services, mobile money,

financial inclusion, the poor.

How to cite: Chitimira & Torerai ‘Policy implications and mobile money regulatory approaches to promote

financial inclusion of the poor in Zimbabwe after the COVID-19 pandemic’ 2023 De Jure Law Journal 241-258

http://dx.doi.org/10.17159/2225-7160/2023/v56a17

* This article was supported in part by the National Research Foundation of

South Africa (NRF), Grant Number: 141933. Consequently, the authors wish

to thank the NRF for its support. Also see Torerai A Comparative Statutory

Analysis of the Use and Regulation of Mobile Money Services to Promote

Financial Inclusion for the Poor in Zimbabwe (LLD Thesis 2022 North West

University) 195-207.

242 2023 De Jure Law Journal

1Introduction

Over the last decade, a surge of new innovative digital financial services

(DFS) has evolved, primarily benefiting the poor and other economically

marginalised people in Zimbabwe.1 This approach is aimed at

accommodating the poor, low-income earners, small business

enterprises, and rural communities that were previously excluded from

the formal financial sector and financial markets to enable them to

access formal financial products and financial services such as mobile

money through their mobile cellphones.2 Thus, individuals who could not

access banking services are able to make deposits, transfer money,

withdraw cash, pay utility bills and school fees, buy goods in retail

outlets, and save money in their mobile wallets using mobile money

services in Zimbabwe.3 The emergence of DFS such as mobile money

has broadened financial access opportunities to the unbanked, the poor,

and other financially excluded persons in Zimbabwe.4 The use of mobile

money increased considerably after the outbreak of the coronavirus

(COVID-19) pandemic in Zimbabwe and many other emerging

economies. While the COVID-19 pandemic brought about a shift in

financial behaviour due to health concerns, mobile money made it

possible for people to access financial services and transact remotely.5 In

this regard, individuals could process transactions on their mobile

phones or other hand-held electronic devices in the comfort of their

homes. There was a notable reduction in the usage and reliance on cash

and an increased use of mobile money in Zimbabwe during the COVID-

19 pandemic. According to the World Health Organisation (WHO),

Zimbabwe recorded 262,324 confirmed cases and 5,658 deaths of

COVID-19 as of February 2023, against the global total of 755 million

confirmed cases and 6.8 million deaths.6 Zimbabwe’s confirmed COVID-

19 cases and deaths were relatively low as compared to that of other

countries and the overall global COVID-19 pandemic death toll.7 It

appears that the use of mobile money by many people in Zimbabwe

somewhat reduced the transmission rate of COVID-19 because no

1 Gukurume and Mahiya “Mobile Money and the (Un)Making of the Social

Relations in Chivi, Zimbabwe” 2020 Journal of Southern African Studies

1204-1205.

2 Gukurume and Mahiya 2020 Journal of Southern African Studies 1204.

3 Lumsden “The Future is Mobile: Financial Inclusion and Technological

Innovation in the Emerging World” 2018 Stanford Journal of Law, Business

and Finance 7-8.

4 Gukurume and Mahiya 2020 Journal of Southern African Studies 1204-1205.

5 Financial Action Task Force (FATF) “COVID-19-Related Money Laundering

and Terrorist Financing – Risks and Policy Responses” 2020 https://www.

fatf-gafi.org/en/publications/Fatfgeneral/COVID-19-ml-tf.html (last accessed

2023-06-30) at 7-8.

6 World Health Organisation (WHO) “Zimbabwe: WHO Coronavirus Disease

(COVID-19) Dashboard With Vaccination Data” https://covid19.who.int/

region/afro/country/zw (last accessed 2023-02-08).

7 WHO “Zimbabwe: WHO Coronavirus Disease (COVID-19) Dashboard With

Vaccination Data” https://covid19.who.int/region/afro/country/zw (last

accessed 2023-02-08).