Banking Reforms Seen as Key to Zimbabwe’s 90% Financial Inclusion Target by 2030

Banking sector reforms and deeper financial markets are central to Zimbabwe’s National Development Strategy 2 (NDS2), with Government aiming to increase financial inclusion to above 90 percent by 2030.

Under the 2026–2030 economic framework, the financial services sector has been identified as a key driver of inclusive growth, investment mobilisation and long-term economic stability. Authorities plan to broaden access to formal banking services, strengthen savings and credit uptake, and accelerate the use of digital financial solutions to support economic participation.

Through NDS2, Government intends to bring millions of currently unbanked and underbanked citizens into the formal financial system, while repositioning banks to better support productive sectors of the economy.

However, the Actuarial Society of Zimbabwe (ASZ) has warned that meeting these ambitions will require significant changes in banking models, particularly in risk assessment, capital deployment and revenue generation.

In its analysis of NDS2’s impact on the financial sector, ASZ said conventional lending approaches will be inadequate, especially when extending credit to sectors such as agriculture and small to medium enterprises (SMEs).

“To lend prudently to productive sectors under NDS2, banks must adopt actuarial-based credit risk models that incorporate alternative data beyond traditional collateral requirements,” the Society noted.

ASZ further highlighted that the proposed reforms demand a shift away from compliance-focused capital calculations towards more strategic capital management.

“Risk and actuarial professionals must focus on allocating capital to business lines that deliver returns above the cost of capital, rather than merely meeting regulatory thresholds,” the report said.

NDS2 also prioritises lower transaction costs and the expansion of financial technology through Regulatory Sandboxes, as Government seeks to promote affordable, digital-driven financial inclusion.

At the same time, the strategy introduces stricter Risk-Based Capital (RBC) frameworks across the sector — a development ASZ says will fundamentally reshape banks’ income structures. The Society noted that heavy reliance on non-interest income, which has historically insulated banks from lending risks, will increasingly come under regulatory scrutiny.

“This will compel banks to depend more on funded income from lending and high-volume digital transactions. While this supports financial deepening, institutions that fail to adapt may struggle to remain sustainable,” ASZ said.

According to the Society, the transition to full RBC regimes for both banks and insurers will expose inefficiencies in capital utilisation.

“Institutions holding idle capital or excessive risk without adequate returns will experience declining returns on equity,” ASZ warned.

Beyond financial inclusion, NDS2 places strong emphasis on infrastructure development and sustainable finance, with Government increasingly relying on non-budgetary funding mechanisms.

These include infrastructure bonds, Real Estate Investment Trusts (REITs) and Green Bonds, which are expected to become important tools for financing long-term development projects.

ASZ anticipates growth in specialised financial instruments under this policy direction, noting that they could help address the shortage of quality long-term assets needed by pension funds and insurance companies.

The Society added that prescribed asset frameworks are likely to evolve to prioritise infrastructure-linked and developmental investments.

“As a result, actuaries and investment analysts will need enhanced skills in valuing complex infrastructure projects and assessing climate-related risks,” the report said.

ASZ also cautioned that environmental, social and governance (ESG) considerations are now integral to financial sector growth, urging institutions to adopt ESG frameworks urgently.

According to the Society, access to international funding and local green finance incentives will increasingly depend on strong ESG compliance, positioning sustainability as a core component of financial deepening under NDS2 rather than an optional add-on.