Strategies to Enhance Public Confidence in the Zimbabwean Banking Sector

Andrew Munoangira, Primrose Kaja


This research was initiated after realizing that depositors are continually channeling their funds through the informal sector and that deposits in banks are increasing to be transitory in nature, an indication of low public confidence, despite a regulatory system with an interrelated financial safety nets. The main aim was to determine the variables and concepts that regulators and commercial banks might need to target in order to promote public confidence in the banking sector. To effectively determine the relationship that exists between financial safety nets, bank specific factors and public confidence the researcher adopted descriptive and explanatory research designs since the research was based on cross-sectional data. To complement this evaluation, the researcher adapted a probit regression model to determine the determinants of public confidence in the Zimbabwean banking sector. The adoption of this research may lead to a dynamic and proficient financial system, which may lead to increased public confidence in the banking system in Zimbabwe and eventually to growth and development of the entire financial system in the country. Further research could be carried out on assessing the reforms that can be adopted by the central bank to enhance confidence in the Zimbabwean banking sector without printing of notes, the relevance of setting up a financial administrative court, which might enhance confidence in the banking sector.

Keywords: public confidence, financial safety nets, moral hazards, bank runs

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ISSN (Paper)2222-1905 ISSN (Online)2222-2839

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