Significance of Banks to Economic Well-being and the Crisis of Public Confidence Loss in Zimbabwe

Abstract

This study examines the pivotal role of banks in Zimbabwe's economic well-being and the detrimental effects of declining public confidence within the banking sector. Using a total of 67 secondary literature documents in the form of journal articles, online newspaper articles, blogs, theses, reports and viewpoints accessed from social media comments section found under online newspaper articles, the study argues that banks act as effective agents of value transfer. They also mobilize domestic savings to aid economic well-being. However, there is a loss of public confidence within the banking sector, and this is contributing to an economic crisis. This loss of public confidence in the banks has been found to be caused by policy inconsistencies, poor management, corruption and inflation among other factors. This study has observed that the loss of public confidence disturbs the normal functioning of the economy. Public confidence loss in banks has also been found to have contagion effects for Foreign Direct Investment, which is among the most important ways of improving a country’s national gross domestic product. With enough local investment, the economy should be able to address its unemployment, poverty and inequality crises and attract the much-needed foreign investors, not only those from the East, but also those from Global North. However, local confidence must be cultivated first as this would market the national economy internationally.