Speaking on regulating bank charges and mobile money tariffs, Mr D. Chinoda of the Competition and Tariff Commission first elaborated on the cash crisis in Zimbabwe giving possible reasons for it. He acknowledged the huge appetite for imports and underfunded nostros being some of the major reasons.
With the cash crisis undeniable people have had to resort to e-transactions and accordingly there has been an increase in these. There has been a huge uptake but it has not been enough as 70% of Zimbabweans still have limited access to mobile financial services.
With the necessity of e-transactions in this economy the reason why most Zimbabweans still do not have adequate access to mobile financial services becomes key. Mr Chinoda cited the high bank charges and mobile money tariffs as being some of the major reasons.
The reason for the high bank charges and mobile money tariffs especially was ascribed to collusion by the players in the market. The fact that the charges and tariffs are so similar across the market stuck out as a concern. According to Mr Chinoda the collaboration by the few players in the market and the power they have as a cartel is a big concern.
Competition is necessary for the free market to function and when the banks seemingly agree on bank charges and not compete it is the public at large that suffer. With banks in Zimbabwe making most of their profit from non interest income (read bank charges) it is clear there is motive for banks to collude when it comes to bank charges. It is no coincidence that bank charges are identical across the market.
Is there really collusion? There certainly seems to be evidence to support the statement.