Determinants Of Restoring A Culture Of Saving In Banks Among Zimbabweans

ABSTRACT

The study set out to examine the determinants of restoring the culture of saving in banks among Zimbabweans over the post-independence Zimbabwe. Both quantitative and qualitative approaches were used in the study. Primary data from 200 bank customers from across the ten provinces of Zimbabwe randomly selected was used in the study to gather opinion regarding the restoration of savings practices among Zimbabweans. Secondary data from the Reserve bank of Zimbabwe on bank deposits, bank liabilities, deposit rates, borrowing rates and liquidity ratios were also used to model the determinants of restoring a culture of saving in banks among Zimbabweans. The total deposits to total liabilities ratio from the secondary was used in the study as a proxy for the savings culture in Zimbabwe. Data from ZIMSTATS that included Gross Domestic Product (GDP), Gross Capital formation, exports, the country’s total debt, GDP per capita and year on year inflation were also used to relate the savings practice to the performance of the economy. This was buttressed by the opinions as well as comments from the Central Bank officials, Ministry of Finance officials, Deposit Protection Corporation (DPC) officials and officials from Microfinance Institutions purposively chosen. Statistical Package for Social Sciences (SPSS) version 20 was used for the analysis of the data and theme analysis was used for the interview guide. The major research findings were the inadequacy of savings products in the market to meet different savings requirements of the diverse population. The study also found a weak association between the savings practice among Zimbabweans and the crucial macroeconomic fundamentals as well as low confidence by bank customers with the Zimbabwean financial market emanating from the inadequate legal and policy framework. The policy and legal conditions, politics, the poorly performing economy as well as product inadequacy in the financial market across the diverse population were the major factors inhibiting the restoration of the culture of saving in banks among Zimbabweans. Based on the findings and conclusions the researcher recommended legal and policy reforms for authorities and the banking institutions to come up with relevant products and services for the diverse population especially the marginalised communities. Further study recommended included an analysis of the savings behaviours of the marginalised communities in Zimbabwe like the rural communities, women and the disabled in view of the adoption of mobile and electronic banking by the financial services sector.