The impact of the RBZ’s NFIs on the accessibility of financial services by special Interest groups in marginalized areas: the case of MSMEs in Nyanga District

Abstract

The study investigated the impact of the RBZ’s NFIS on the accessibility of financial services by special interest groups in marginalized areas focusing on MSMES in Nyanga District. The overall objective of the study was to establish the impact brought by the introduction of the NFIS in 2016, focusing on special interest groups in marginalized groups. The main hypothesis of the study stated that “NFIS has no impact on the accessibility of financial services by MSMEs in marginalized communities. In an endeavor to measure the stated hypothesis, the study adopted a pragmatic research philosophy. A stratified random sampling technique was used to draw a sample size of 623 respondent comprising MSMEs in Nyanga District and a purposive sampling technique was employed to draw respondents for interview. Data was collected through a partly self-administered questionnaire which was hand distributed to sampled MSMEs and hand collected questionnaire for data analysis. Four MSMEs in Agriculture and one Senior representative of MWAGCD were interviewed. A Statistical Package for Social Scientists (SPSS) version 20.6 was employed to analyze the gathered quantitative data. The analyzed data was presented graphically, using histograms, pie charts and statistical tables. The major finding of the study affirmed no positive impact of the NFIS on the accessibility of financial services by MSMEs. However, the findings indicated that although the positive impact was not available, the aspects regarded as challenge in accessing financial services varied greatly with significantly a huge number of respondents confirming availability of the these challenges. Poor financial literacy, infrequent use of financial services and unavailability of the financial services was evident at high level of significance. The findings are very important to the policy makers, financial sector, NGOs, the WBG, special interest group and academic. The theoretical contributions of the study were that it has established need to adopt two stance of policies (market developing and market enabling) relating to the financial possibility frontier in economy where two extreme status of affairs existed. This aspect was missing from the reviewed literature. The major recommendations to the regulatory and policy makers was adoption of a rigorous implementation strategy, incorporating the percepts of VUCA view of the world in crafting policies, considering premising financial inclusion on digital platforms. To the financial services providers major recommendations included enhanced risk management approach into blue oceans (MSMEs) so as to tap sustainably into this market, customer oriented problem solving approach, promoting financial education and awareness to customers, employing systems thinking in the service designs and also intensification of adverting and market visibility. The study also provided recommendation to the NGOs, WBG and special interest groups. The study concluded by proffering suggestions for furthers studies