The current liquidity crisis in Zimbabwe has hit mobile money really hard. A report by the telecoms regulator in Zimbabwe, POTRAZ, says mobile money transactions in the last quarter of 2016, October to December, dropped 35% from the previous quarter.
Since 99% of all the mobile money transactions in country are EcoCash transactions, mobile money in Zimbabwe really just means EcoCash.
Unfortunately the regulator wouldn’t provide any further details, which is quite unhelpful.
However, using numbers in the previous quarter’s report, the total value of cash-ins and cash-outs was US $872 Million (split almost evenly between the two). A 35% decline would mean that it’s now around $568 Million with cash-ins and cash-outs around $285 Million each.
The regulator does say though in the report that there’s cause for worry that if this continues, mobile money won’t make sense anymore as a business:
“This shows the impact of cash shortages is having on mobile money transactions, which if not addressed, can cause further decline in mobile money transactions, rendering Mobile money business unviable due to low volumes.
The numbers that would have been interesting to see would be how much merchant payments are now done via EcoCash. My assumptions is these are on the increase as they don’t require any cashing in or out; salary is deposited by employer into individual’s account; individual transfers the money to EcoCash wallet; drives to a service station and buys their fuel using EcoCash, goes to Pick n Pay and pays using EcoCash.
I hope POTRAZ considers making these available in the next report, or a revision of this one. Econet could make these numbers available too so their shareholders are assured it’s not a doom and gloom scenario that this 35% drop suggests. Unless it is. In which case they’ll just wait for when they release the year ended February 2018 financials.