Small to medium enterprises as well as companies that have been using the EcoCash Payroll will have access to credit lines depending on transaction volumes and value. According to FinX, EcoCash Services chief operating officer Japhet Aritho made these remarks at a breakfast meeting that was attended by stakeholders in small business development including SMEs and Corporative Development Minister Sithembiso Nyoni.
According to FinX, Mr Aritho emphasised that EcoCash was not the one advancing loans but would facilitate an easier negotiation with Steward Bank, the financial concern that is part of the Econet family. The transaction value recorded through EcoCash would ultimately determine the SME or company’s case in seeking credit lines from Steward Bank.
This move by EcoCash Services ties in with what Econet Wireless founder Strive Masiyiwa said when the re-branding of TN Bank was announced. He hinted that Steward Bank would mobilise savings and channel funds towards helping young people start businesses.
Interestingly Econet seems to have created a win-win situation that promotes the vision of their founder, supports the strategy of two of their entities, whilst offering an avenue for SMEs and companies to find cash relief in a dry environment.
The benefits for Econet with this move don’t just end there though. With the tussle for market share between EcoCash and Telecash, Econet may have found a way of luring SMEs and companies to their corner. Their strategy is pretty straight forward. If you want to qualify for future financial support from Steward Bank all you have to do is to join the right ecosystem (no pun intended).
So far the uptake has been impressive, if the information provided by EcoCash is anything to go by. According to Aritho, between 11 and 20 corporates have been signing up for the EcoCash payroll service each week. In February, Econet Services CE Darlington Mandivenga said uptake to the service was growing at a rate of 82% but they never clarified to say 82% of what.
It’s safe to assume that this credit line extension will help improve the number of companies they sign on to EcoCash Payroll. What remains to be seen is if this credit support (where is EcoCashCredit?) will be extended to EcoCashSave account holders anytime soon as had been promised.