Opening Insurance to Zimbabwe’s Informal Economy

By Newton Mambande

HARARE – ZIMBABWE’s informal economy, which includes millions of entrepreneurs and workers, remains largely uninsured, leaving many vulnerable to financial shocks and uncertainty.

The sector, which includes street vendors, small-scale miners and other self-employed workers, contributes significantly to the country’s economic activity but is often underserved by mainstream insurance providers.

Various studies and industry estimates suggest that a significant number of Zimbabweans earn their livelihoods in informal activities that generate modest and often unpredictable incomes.

Many vendors and small-scale miners, for example, earn relatively low monthly incomes that can fluctuate depending on market conditions and productivity.

Despite their economic contribution, many individuals working in the informal economy remain outside the formal insurance market. Key barriers include limited financial literacy, affordability challenges, and the perception among some insurers that this market segment carries higher operational risks.

“There is a significant opportunity for insurers to develop products that serve the informal economy and promote broader financial inclusion,” says Mark, an insurance industry analyst who requested anonymity because he is not authorized to speak publicly.

According to him, tailored micro-insurance products, flexible premium payment systems and partnerships with informal sector associations could help insurers reach this underserved market.

“Insurance inclusion has the potential to strengthen financial resilience among low-income workers and small entrepreneurs,” he says.

“If structured appropriately, it can help reduce vulnerability to income shocks while expanding the insurance industry’s customer base.”

The Insurance and Pensions Commission (IPEC) has in recent years encouraged the development of innovative insurance solutions aimed at expanding coverage, including products designed for low-income and informal sector participants.

As Zimbabwe pursues broader financial inclusion and economic resilience, expanding insurance access within the informal economy could play an important role in reducing vulnerability and supporting sustainable livelihoods.

Newton Mambande is an entrepreneur and researcher whose academic work has been published in scientific journals. He can be contacted at newtonmunod@gmail.com or +263 773 411 103.