EXAMINING THE EFFECT OF BANK-SPECIFIC FACTORS ON PUBLIC CONFIDENCE IN A MULTI-CURRENCY ENVIRONMENT

Abstract Globally, the banking sector continues to serve as a fundamental driver of economic growth and development primarily through its role in facilitating financial services to the manufacturing and industrial sectors. Nevertheless, there is continued liquidity challenges, financial stability concerns, infrastructure and technological constraints crippling efficient operation of the sector leading to low utilization of banking services by informal sector in Zimbabwe. Such a situation has constrained the financial intermediary role of banks of supplying affordable long-term loans to productive sectors of the economy as a catalyst for economic growth through the finance-growth nexus. Therefore, this study sought to provide an understanding of the effect of bank-specific factors on bank public confidence in Zimbabwe under the multiple currency system. The study adopted a quantitative research design and utilized secondary data which was analysed using EViews Software Package Version 7. Study findings revealed that non-performing loans (NPLs) has a significantly adverse effect on bank public confidence while liquidity, business intelligence and analytics, bank size, asset quality, and digitalization have a statistically significant and positive effect on bank public confidence. Thus, the study recommends banks to implement ‘pay as you go’ banking models to allow bank clients to only incur costs when a service is utilized as this will motivate and attract the informal sector into using formal banking system alleviating the liquidity position of the sector raising bank public confidence.