We use survey data from a sample of 4000 adult financial consumers in Zimbabwe to analyse the determinants of financial literacy and its effect on individual's savings decisions. Results show that women have lower financial literacy than men. Furthermore, individuals' residing in rural areas exhibit lower financial literacy compared with urban financial consumers. Financial literacy and financial services interventions targeting women and rural individuals should be strengthened. Econometric results show that financial literacy positively influences savings behaviour for both rural and urban individuals. Furthermore, financial literacy positively influences informal and formal savings. Policy interventions that foster financial literacy are needed to improve individuals saving behaviours.

Alexandra, Buffalo City, Durban, informal settlements, Johannesburg, postapartheid cities, quality of life,

Purpose Although credit plays a crucial role in modern society, the increased availability of credit is partly responsible for higher levels of debt burden and household over-indebtedness. However, despite the serious consequences of over-indebtedness on household welfare our understanding of the factors that determine over-indebtedness and the link between over-indebtedness and poverty is limited. The purpose of this paper is therefore to identify drivers of over-indebtedness at an individual level and its link with poverty. Design/methodology/approach The authors analysed the determinants of over-indebtedness and its links with poverty employing a binary logistic regression model using data on 51,359 individuals from 11 economies in the Southern Africa Development Community. Findings The results suggest that over-indebtedness is driven by, among others, lack of credit literacy, cross-borrowing and income. The results also suggest that over-indebtedness is likely to impoverish the indebted. Practical implications Policies that encourage access to financial services such as credit should be designed such that increased financial inclusion does not aggravate poverty and inequality. Originality/value The authors used a unique financial inclusion survey that reports data on financial inclusion and poverty measures to identify the determinants of over-indebtedness and its link with poverty.

Efforts are being exerted in many developing countries to promote financial inclusion by increasing individuals’ access to financial products and services. However, literature suggests that increasing the supply of financial products and services per se may not help in expanding financial inclusion unless concerted efforts are exerted in enhancing financial literacy. This is because financially literate individuals are more likely to appreciate the value of financial services and hence take up financial products. This paper reports the link between financial literacy and inclusion using data from a demand side financial inclusion survey conducted in Kenya and Tanzania in 2016 covering a total of 6029 individuals. Results from our instrumental variable regression analysis confirmed that financial literacy is a strong driver of financial inclusion. This implies that efforts to promote financial inclusion need to be accompanied with financial literacy campaigns in both countries.

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