Every Zimbabwean Bank Should Be Very Afraid Of Steward Bank’s Kwenga Or At Least Copy It Faster Faster

Tinashe Nyahasha Avatar
Steward Bank CEO, Lance Mambondiani at the launch of Kwenga

What business are we into? This is an important question every business should keep asking themselves and in answering it they should not assume the easy, lazy and obvious. That doesn’t mean the answer has to be complex though. If you speak to my colleagues they will tell you my preferred solution is the simplest thing that works. Beyond that, it’s all fat.

Let’s look at traditional banking

Steward Bank was plagued by systems issues not so long ago and some bankers I know were laughing at them and calling them names. The argument against the purple bank has always been that they do not understand how banking works. They have been chided for being aggressive in opening accounts for people on the street who are considered a burden and not a customer by traditional banking.

Traditional banking is about buying and selling money. Get money from depositors and then lend this money to businesses, entrepreneurs and others who can create value and bring back more. In this set up you realise that the person who opens a bank account is not the customer to the bank: no the depositor is a mere supplier. The bank’s customer is the borrower because that’s where their money comes from.

Who’s the customer?

Everyone knows that the customer is king and always right. How about the supplier? Isn’t the supplier a servant and always a replaceable nuisance? It’s wrong but generally that’s how suppliers are treated. Banks behave the same. Have you ever gone to enquire about account opening wakangopfeka imwe iya iya (wearing shabby clothes)?

I have. That’s how I have always interviewed who gets to be my banker. Yes, I always considered my enquiry about opening accounts an interview for the bank because I just can’t give my hard earned money to anyone particularly one who judges me on appearances. Not so many banks would pass my interview.

Standard Chartered Bank has been refusing to open an account for me and my business for 3 years now because they said there is a ‘new’ system implementation going on. For three years? But I know people who work for international donor agencies, embassies and others who were able to open accounts with the bank without any question asked and the systems seemed to work fine.

It bothered me but not anymore. I keep going there to attempt opening an account just to check if systems are still being worked on but I have come to realise that I am not their customer. I’m just a wanna be supplier. What I want to supply, they are not buying. It’s OK. Anyway, I am digressing am I not?

Why were other banks sneering at Steward Bank? Because to a banker’s mindset, Steward Bank was concentrating on recruiting low level suppliers who did not have enough money to supply. I used to sneer together with the rest of the smart clad banker types until I saw what Steward Bank was doing and I wrote about it last year.

Definitely the system outages were inexcusable. I have to say that in case they think I am a fan. I am a fan to business models not to businesses. The Steward Bank business model is fascinating like hell.

Recap Steward Bank’s game plan

Steward Bank decided to transform itself from being a bank to be a platform. A transaction platform to be precise and tech ordinarily became their cornerstone. If you look at them as a bank you will grossly underestimate them. The reason I don’t bank with them is that they are not a bank.

They are a Fintech business, more of a startup for that matter. Like all other platforms, they make their money from fees. They exist to enable transactions and they want to push as many as they can. The low value individuals that are not good suppliers to other banks are valuable customers to the purple fintech startup because they perform more transactions than the high net worth individuals.

It is no coincidence that Steward Bank accounts were and can be opened on the streets. When you are a platform you do not want to spend too much chasing large elephants, you just want to build a trap that traps deers. Elephant hunting is for suits, deers can deal with guys in purple t-shirts.

Comes Kwenga

By introducing Kwenga, Steward Bank is solving a collection problem for its customers. Techzim advised a bigger bank to invest in a kwenga like device years ago but they could not see it. Why? Banks don’t seek to solve problems for suppliers especially low net worth suppliers, why should they?

Fintech companies exist to solve transaction problems for any situation where money changes hands. That’s how they make money. As cash continues to be a problem musika people and other small traders now realise they can’t keep demanding cash. Steward Bank then gave them an affordable solution to accept electronic funds.

No doubt, all banks are making money from the cash crisis at least on the domestic front but there is a difference on how:

Making money by design vs making money by default

Steward Bank is deliberately making money out of transaction fees because they had deliberately determined to be a platform fintech company whether they call it that or not. It was probably easy for them to make these choices because they are owned by a technology company.

The rest of the banks are making money out of transactions because ndozviripo (that’s what’s there). They are dreaming of the return to the bankers’ hey days where they made money through treasury deals.

This brings me to why the banks should be afraid of Kwenga and why they should shamelessly copy it:

Steward Bank will expand into the core banker’s space with Kwenga

The biggest deal about Kwenga is not permitting the cobbler to accept swipe, the cobbler was still happy to accept Ecocash. The big deal is data. Now Steward Bank has data about the economic activity of so called informal traders who constitute 60% of all business in Zimbabwe.

With data comes ability to lend to this group. In fact the Kwenga product already allows the merchant to apply for loans. All the other banks have been concentrating on giving out salary based loans. This isn’t just about your ability to pay back because you have a salary but because receiving your salary in their bank allowed them to have data on you: how much you earn, how you spend it etc.

If you don’t have a salary that comes through their bank or any other bank, banks are asking for collateral. This effectively is a way of showing the finger to the informal trader.

By capturing small traders who come in their numbers Steward Bank has managed to aggregate suppliers to their banking division. The small merchants bring in little but they do so in large numbers. At the same time they have aggregated small customers. Small traders also want to borrow money. They borrow small amounts but they do so in their numbers.

Extra advantage: lending small amounts to a large number of customers lowers the associated risks.

The blindside

What the other banks may not appreciate is that the most profound thing happening is that Steward Bank through Kwenga are recruiting the most important customer for the banker of the future.They are now going into traditional banking. Steward Bank started off by ignoring traditional banking and concentrating on building a fintech platform.

With the increased sophistication of that platform they now have capacity to diversify into banking. Now because they have the mass market they will be able to out-compete any bank because in a few years time Steward Bank will be the most cash rich bank in Zimbabwe (my humble opinion) unless the others copy Kwenga as a matter of urgency. I advise them to do so.

Of course, I have to say it’s very possible that Steward Bank do not see all this themselves. It’s probable that they have just been coasting along and bumping into things and adopting them because they were cool things. If so, they should start being more deliberate with where they are now. No silly mistakes now, no excitability, now they need to deliberately strengthen their business model.

NB: I said no silly mistakes not ‘no mistakes.’ They should of course remain unafraid of mistakes, mistakes come with the innovator territory.


  1. Sagitarr

    Your article has scratched the surface of what EFT is all about and some of the assumptions you make here can be proven wrong very easily. Yes, Kwenga is an affordable product but not every bank in Zim right now needs millions of disgruntled account holders on its books. Managing them and their expectations is an overhead no bank manager wants to hear about. Banks pay for processing transactions, which is why you might get a minimum transaction value restriction.
    When EW entered the vehicle tracking area, they had very immature and idealistic expectations, which I’m pretty sure they pass on now as inexperience. Rumour has it that they went to CVR and found out that Zim had about 1.2m vehicles and they wanted half that on their books within 6 months of launch date. They thought there would be a rush and it never happened. More than 25 tracking companies exist alongside them today…why? Big business does not easily stampede – there are many “costs” & factors to consider before shifting allegiance. The Kwenga project might follow the same route.
    You assert that numerous small loans are less risky than fewer big loans? From experience its a nightmare to chase after 300 000 people that owe you $3m in total – too much labour and time but a significant amount!
    Lending to folks without collateral is very high risk that’s why some traditional banks run diligence checks first, banks with over 400 years experience do this, it’s not madness its called risk management. Many a bank have fallen by the wayside by ignoring this – Royal, Century, Time bank etc
    Remember that Kwenga is not a new concept or product, its still an EFTPOS device, other banks have been installing these from 1992 or so, its just more affordable. SB will have to prove themselves in managing the huge network of devices they are throwing around – they need paper roll replenishment, they have technical breakdowns, the operators need constant training and an efficient help desk etc – I’ve worked extensively in this field, it’s a nightmare!

    1. Mithiyabo

      I think I agree with Sagitarr.
      That said, I think if well implemented SB must make sure that its customer services or Support centers are well resourced to make sure that the older generation of ogogo and omkhulu at the Market understand how to use the device and also making sure that the network is always up to avoid transaction failures.

      As for the Big Banks in Zim .. most of them do not care much about lower end clients. I reside in S.A and have bank accounts in Zim but every time I go to the bank in Zim I spend more than an hour inside and come up without being helped but you see some guys in what I can call in SA BEE suits walk in get created and with in minutes they are out

    2. Tinashe Nyahasha

      Hey, you really seem to know this space well and you have given me a lot to think about.

      I also contend that some of what you said is because you are looking at banking in the traditional sense and disruption theory actually does not assume that the disrupted are doing anything wrong. To the contrary, incumbents are disrupted whilst they do everything right including listening to their clients. I am still fearful for traditional banks: financial services space is changing fast just like media did and they may be in trouble.

      As for the SB systems integrity, I agree 100%, they need to know that they can’t play the silly games they played last year. Going for the mass market needs them to be more robust than average and last year they were way below average.

      Econet has had the problem of just importing solutions without really analysing the market and developing solutions. If the development of a solution means importing then fine but that has to be done because you have looked at the problem really and you have identified that importation is a real feasible solution. Sometimes it’s just pies in the sky

    3. Technocrat

      You have a point however with Kwenga I No longer need paper roll as a merchant and I just log into their Kwenga Merchant Portal check my transactions in realtime; Ald the loans have colletaral coz remember this device is linked to the merchant’s account. The merchant trust the bank with its money and I’m sure the bank can also trust th merchant with a $40 loan per smaller device which support sharing I.e more than 1 merchant can use same device and still each getting their own monies in their different accounts. $240 per bigger device which is given for E.g Zuva. With or without MPoS every bank or rather business still needs to constantly train and offer good customer service.

    4. Anonymous

      Econet doesn’t hesitate to give a try, remember the airtime tokens soon after dollarisation?

  2. lviton

    Yep, the traditional banking mindset still blinds many in the industry, they didn’t learn anything from ecocash

  3. The J

    Very interesting article, but i do agree that there could be good reasons why the other banks are not too phased about Kwenga. I’d be more interested in finding that out. Why haven’t other banks done the same, when they are clearly capable ? What do they know about releasing pos devices on the streets ? What are the draw backs.
    As usual with Econet they make a big noise and create a bubble that they are about to drop the most revolutionary product and when it finally comes and lands we tend to see dissapointed faces. They did just that with Kwese, the hype was so great and we ended up with movies from the 1940’s so i think other banks are well aware of this. And don’t look into the marketing words too much . There is a reason Steward havent released Kwenga 1 month after saying its available .Paying people to post positive tweets and articles is great but we need the product too.

    1. Tinashe Nyahasha

      Yea, we called them out for launching a product they didn’t have in stock. Econet tends to do that…

      They said they had 5000 units for deployment when we went to see them, I hope that was true otherwise they are going to lose all the mileage they may have gained.

      Yes of course other banks may be uninterested for some reason. I know of one that is preparing to launch something similar though

  4. Worried

    I’ve been in India for 2 weeks and literally shopping all day…swipe it’s only available in big shops…. There are a few on the street but of note they all pos
    …..the only kwenga like device was in a shop…. In market with millions of people that are get internet savvy and data is not limited…. After all these years they don’t have them…begs a serious question…. Off topic I’m paying 7$ for 1.4 gb daily and unlimited calls….

    1. Tinashe Nyahasha

      Zim is in a peculiar place where circumstances have forced the adoption of paperless transactions. Every country wants to go there but they have culture and tradition to contend with. Zim has an opportunity to take advantage of this situation and move forward

  5. nitpik

    This sounds a bit too optimistic. I really wish there were some numbers to support the crystal ball that you are staring into. Otherwise the article was great just not very technically sound.

  6. Fafi

    Hah! My taxi guy just got the CABS version…
    I wonder if it’s why Stewart rushed the launch???

    1. Tinashe Nyahasha

      Oh really?? Thanks. We are definitely writing about this!!! Check the site in a few minutes
      We will acknowledge you definitely…

  7. Chris

    This is an interesting article! My first time to comment on TechZim ever.

    1. Tinashe Nyahasha

      Thanks Chris and welcome to Techzim comments… you will be addicted soon

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