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#Mobile Money

Mobile money is the most credible solution to Zimbabwean cash crisis


Zimbabwe is facing another cash crisis. That much is pretty obvious to the people standing in queues outside some of the retail banks around the country.

Though not as crippling as the cash shortages that the country has experienced in the past, the current spate has affected scores of bank account holders who have had to experience frustrations related to this.

Despite assurances from different institutions that the situation is manageable, some people have already tagged the situation as the start of something that could spiral out of control and lead people down a very familiar and uncomfortable road.


Zimbabweans generally prefer to deal in cash and when it comes to the security of the formal financial system and questions about the reliability of banks, it doesn’t take much to rattle the entire population.

For more than a 10 years citizens have been subjected to different waves of financial services mayhem.

From banks facing curatorship and then going under, accounts of speculative practices from the champions of indigenous financial institutions to a hyperinflation experience that eroded the value of bank deposits and came tied with its own cash shortages, most Zimbabweans will tell you that they have seen the rough side of formal financial services.

The solutions that have been embraced for the current shortage by those affected are fairly obvious. A report in the Herald outlined some of these measures which have included $500 limits on withdrawals, the disabling of the Zimswitch cross-bank ATM facility and the suspension of the Point of Sale cashback facility from some retailers.

The governor of the Reserve Bank of Zimbabwe, Dr. John Mangudya also encouraged people to use plastic money instead of relying on cash. This came ahead of a directive issued to tobacco farmers to open bank accounts from which they would receive the payments for the sale of their crop.

Where is mobile money in all this?

One measure that isn’t being pursued as aggressively, though, is the mass adoption of mobile money services as a way of working around this potential crisis.

Despite its strong presence across the country where it has outpaced formal banking services, mobile money has only been mentioned as one alternative and not as the leading solution that it is primed to be.

Some likely reasons could be the high costs attached with mobile money transactions as well as the fact that the leading provider of mobile financial services, Econet’s EcoCash, (it holds 74.3% of registered mobile money subscribers) which handles the majority of mobile money transactions (it pushed 96.9% of transactions in the last quarter of 2015) is a private sector operator and not a public sector solution.

However, all this is flying in the face of the reality that mobile money has established a firm place in the Zimbabwe financial services matrix. Our country’s economy has slowly embraced the movement of money through informal trading channels and mobile money has emerged as a convenient tool for carrying these transactions.

In the most recent telecommunications sector quarterly report from the industry regulator POTRAZ, mobile money services registered transactions valued at $533 million dollars in the three months ending December 2015 from an aggregate of 7.3 million mobile money subscribers.

The service’s popularity has been fuelled by a high mobile penetration rate, the ubiquity of mobile money agents (there are over 33,000 mobile money agents across Zimbabwe) limited requirements for signup as opposed to formal banks’ account registration and of course, the significant distrust that the country’s banks have earned.

Mobile money service providers also appreciate the convenience that they can deliver and have been going out of their way to integrate their platforms with as many third-party services as possible in the hopes of mopping up as much transactional revenue as possible.

All this points to how mobile money should be at the centre of this cash crisis workaround or at the very least, how it should be more of a solution than the use of plastic money alternatives which the central bank has been advocating for.

For the sake of progress, until the actual solution for the real problem that is instigating this cash crisis has been identified, it would probably be worth exploring how the use of mobile money can be positioned as a solution.

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