Diaspora remittances surged 17% to US$490 million in the first quarter of the year from the same period in 2023 as Zimbabweans living outside the country increased their support to relatives back home.
In the same period last year, diaspora remittances were US$420 million.
Experts say the surge in remittances will help oil the economy which is mainly driven by the United States dollar.
Economic analyst Marlon Gwadu told NewsDay that remittances are a critical source of foreign currency for Zimbabwe.
“This influx of capital is being deposited into banks and mobile money platforms, providing the much-needed liquidity for financial institutions to lend to businesses and individuals,” he said.
Gwadu said the surge in foreign currency is expected to provide the much-needed liquidity for financial institutions to stimulate economic activity.
“The increased liquidity allows banks to offer a wider range of financial products, including loans for entrepreneurs, mortgages, and investment opportunities. This, in turn, stimulates economic activity as businesses expand, new ventures are created, and consumers have greater access to credit.”
Another economic analyst, Stevenson Dlamini, noted that the influx of cash is driving a number of positive developments.
“Banks are seeing an increase in deposit accounts as recipients of remittances look for secure places to save their money,” he said.
“Microfinance institutions are also benefiting, as remittance recipients use the funds to invest in small businesses and income-generating activities.”
Dlamini also highlighted the impact of government policy changes aimed at liberalising the financial sector and promoting financial inclusion.
Economic analyst Batsirai Matsika reiterated the need for financial services companies to offer innovative products and services to meet the evolving needs of Zimbabweans.
“Key to this development of remittances is financial inclusion. Remittances make use mostly of the fintech space that is also accelerated and in that way, most of the traditionally unbanked and underbanked societies have managed to access finances through these services,” he said. — NewsDay
