FINANCIAL INCLUSION IN AGRICULTURE: LESSONS FROM ZIMBABWE

Low levels of financial inclusion and high levels of poverty particularly in the agricultural sector motivated this study. The paper sought to investigate the drivers of financial inclusion among the smallholder farmers in Zimbabwe using household-level data. The logistic regression was used to assess the factors that influence the probability of households to demand financial products i.e., a bank account. The results from the log it regression analysis indicated that financial inclusion was influenced by off-farm income, age of the household, distance, transaction costs, agricultural extension service and size of the household. Household size, transaction costs, agricultural extension service (households not participating) had a negative influence on the probability of a household having a bank account. As a result, the government and financial service providers must come together to ensure that farmers do have access to financial products and services through shortening the distances travelled by farmers to financial institutions, intensifying the various financial products provided by various financial institutions through the formation of public-private partnerships as well as increasing extension services where farmers receive financial education.