It’s Tough Doing Business In Zimbabwe; The Story Of A Crypto Exchange

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Be warned, this story will make you angry. We have been told time and time again that Zimbabwe is for sale open for business. This story will highlight just how empty that statement is, or at the very least get you asking just to whom (who?) is Zimbabwe open.

Tatenda Mabungu

Tatenda Mabungu is one of own, born and bred in Zimbabwe. He moved to South Africa in search of greener pastures where he has been based for years now. However, like most Zimbabweans living outside the country he still longs to see Zimbabwe prosper and wants to be part of the remedy.

The chance for him to be involved in the Zimbabwean economy came when Robert Mugabe was ousted from power and the new incumbent, President Mnangagwa declared Zimbabwe open for business. The new president assured Zimbabweans living abroad and the world at large that the perfect time to rebuild Zimbabwe had come.

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Tatenda Mabungu heard the message and his patriotic juices flowed right through to his purse-strings. He came back to Zimbabwe for about three months in order to set up a business here – Styx24.

Styx24

Styx24 is a cryptocurrency exchange which allows users to trade bitcoin, Litecoin and Dash. The exchange came in to challenge the monopoly of the biggest cryptocurrency exchange in Zimbabwe – Golix.

The guys over at Styx24 were not amused by Golix’s efforts. Styx24 was to come in offering cheaper transaction fees and an auto-refreshing trading page among other advantages.

The exchange went live in the first week of February 2018 but that was in spite of mounting challenges to set up the business.

 

Obstacles in setting up a business in Zimbabwe

It took Tatenda 6 weeks to register his company. He persevered through the long registration processes and ridiculous requirements until the business was registered.

However, when it came to opening a bank account for the business he found the going tough. He has been trying to open a bank account for Styx24 for 5 months now with no luck. He notes how he, a Zimbabwean, has bank accounts in Kenya and South Africa and yet fails to open one in Zimbabwe. He says it takes all of 10 minutes to open a business account in South Africa.

The banks he has approached have turned him down for different reasons.

Barclays (Kwekwe) not only turned him but were rude about it. Tatenda says it was like he spit in their faces when he inquired on how to open a new account. Standard Chartered (Kwekwe) were polite and professional but also turned him down.  Then there is…

 

BancABC

Tatenda has a personal account with the bank. He has had to use that account as Styx24’s business account. The experience? As terrible as it can get.

The bank owes him thousands and he has been trying to recover that money for months. How does the bank owe him?

Tatenda would effect a Zipit transaction (a transfer of funds between accounts at different banks) and it would fail. Checking the balance would confirm that the transfer was not made. He would try again and succeed.

All well and good except that the bank would notify him after a month or so that that first transaction which ‘failed’ had in effect not failed. The bank would then deduct the amount from his account for the second time.

Trying to resolve the issue with the bank has been an exercise in futility. The bank does not respond to emails, calling is as good as chucking airtime into the toilet.

 

Uneven playing field?

Why did he not open a business bank account with BancABC instead of using his personal account? I hear you ask. He tried, way back in February 2018. The response he got is baffling.

He was told that the Reserve Bank of Zimbabwe (RBZ) did not allow them to open accounts for businesses involved with cryptocurrencies. What? That was in February, months before the whole fiasco where the RBZ tried and failed to ban the trading of cryptocurrencies in Zimbabwe.

During that February, the other cryptocurrency exchange – Golix – was up and running and had multiple bank accounts in Zimbabwe. Tatenda asked how it was possible that Golix could have business bank accounts and yet Styx24 could not and he never got a satisfactory answer.

 

Big plans for Styx24

Styx24 has steadily been growing and the plan was to introduce two ATMs where users could buy or sell cryptocurrencies. One of the ATMs was to be placed at their offices in Harare and the other at the airport. The ATMs were bought and were ready for deployment when the RBZ happened.

Mid-May 2018, the RBZ banned the trading of cryptocurrencies, ordered Styx24 and Golix to cease operations, Golix sued and the ban was reversed. However, to this day even Golix does not have control of their bank accounts. Golix communicated that,

The interim relief does not guarantee that we will get our bank accounts reopened. We are working hard to get our bank accounts reopened…

The RBZ fiasco and the response of banks to that episode just piled on the difficulties for Styx24 to operate as a Zimbabwean company.

 

Styx24 moving out of Zimbabwe

The love of one’s country only takes one so far. Tatenda is now looking to move the business operations to another African country where conditions are conducive for entrepreneurs.

Zimbabweans will still be able to trade on Styx24 but Tatenda says in 2 weeks or so the company will be registered and operating from another country.

Yet another Zimbabwean business looks set to flourish outside of Zimbabwe. This is not because Zimbabweans lack patriotism but because of the 159th ranking out of 180 economies in ease of doing business.

 

State of Blockchain Technology in Zimbabwe report

Blockchain technology is what makes cryptocurrencies possible and in turn companies like Styx24. The technology however has so many other applications and Zimbabwean companies are utilising it.

Techzim recently released a report focusing on the practical applications of the technology, the companies currently utilising it in Zimbabwe and the barriers to adoption in Zimbabwe. The Styx24 story only came in after the report had been released.

To buy the State of Blockchain Technology in Zimbawe report simply Ecocash the fee of $4.99 to Techzim Merchant Number 83688 and then send an email with the reference number to admin@techzim.co.zw. For other forms of payment please email admin@techzim.co.zw

GolixBancABCReserve Bank of Zimbabwe

Golix is a Cryptocurrencies exchange in Zimbabwe. Golix was founded in December 2014 and was initially called BitFinance while their exchange was called Bitcoin Fundi. The company was founded by Tawanda Kembo and Verengai Mabika. In May 2018, Golix was ordered to shut down operations... Read More About Golix

BancABC is a financial institution in Zimbabwe wholly owned by Atlas Mara Limited. The bank was initially founded in 1956 as First Merchant Bank of Zimbabwe (“FMBZ”) was by Anglo American Corporation Zimbabwe Limited. However BancABC itself was created in 2000. ABC Holdings Limited is... Read More About BancABC

The Reserve Bank of Zimbabwe (RBZ) is the central bank of Zimbabwe. Its offices are located at number 80 Samora Machel Avenue in Harare. The Reserve Bank of Zimbabwe operates under the Reserve Bank of Zimbabwe Act, Chapter 22: 15 of 1964. The Act provides... Read More About Reserve Bank of Zimbabwe

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19 Comments

  1. Carina says:

    Interesting piece. Cryptocurrencies are baffling even countries like Nigeria and its sad that Tatenda has had a tough experience. In deed Zimbabwe needs to live up to its mantra that is now sounding more like political propaganda. I feel sorry for him but I don’t doubt that with such tenacity, he will do great. Its a matter of time.

    On another note, I bank with BancABC and as far as I understand, they don’t have zipit. Do you mind telling us when they started having it because I certainly would like to be on it.

  2. $$$ says:

    So it’s true golix was charging more… And yes bancabc does do zipit.tatenda I find it hard to believe that you are a zimbabwean and you think it’s easy to open a bank account… Why do you think ecocash has overtaken them… And for sure Barclays are rude and I hate their service but at the time I like you was turned down with our banks so I just had to take the scrapes… If you had requested to see the manager at bancabc I’m sure things would be different… And don’t know why people are being duped by this new dispensation nonsense… What’s exactly is new… It’s the same people in the same positions Save for a few familiar faces… Is really the same people…I can’t understand why the media and opposition have not picked this up… Time to vote for real change… Tatenda vote them out
    In future you just got to grease the right hand and it will be done quickly.

    1. Anonymous says:

      Zimbabwe is open for business that is the message from the new dispensation. But as far as I can tell from the article, the new dispensation is not at fault here (except when it comes to the ban on crypto which was reversed so that argument is now void). The real issue I’ve picked up is how banks operate/treat prospective customers and how registration of a company is a hustle in Zimbabwe.

      In my opinion, the issue lies with Zimbabweans at an individual level and nothing to do with the dispensation. What do you want them to do, tell banks how to handle/deal with customers? How the Registrar of companies should improve their internal processes? Come-on guys. These are issues separate from the new dispensation. These are issues that have more to do with companies, work ethic and culture and how we execute.

      For me, we need to isolate the government from certain issues and pin-point the real issue. Until we are able to do that, no-matter who is in office, our country will always find itself in doldrums because we are looking to someone to resolve an issue they have no control over what-so-ever. This is a work culture issue, not a Zimbabwe is open for business issue. TechZim should be careful of the opinions they propagate. I’d advise that you write articles that identify the real issues and help propel Zim forward. On this one, we are looking in wrong direction and blaming the wrong party. We need to ask ourselves and be honest with each other on an individual level, are we doing enough to change the course of history our country is currently upon? Are we putting in 100% and 110% to catch the developed countries in the next 10 or 20 years at an individual level? If yes, then maybe we might.

      1. Common Sense says:

        I mean every offence in saying you are either zanu pf or just plain silly. Zimbabwe is Open for business is not a geographical mantra. It refers to various aspects including the Banking sector and its conduct. How does an investor bring in money when he cannot have confidence in the system. The Sector is one of the most highly regulated sectors. They look and AML, KYC and every Besel Risk operator known to men. In addition to that the RBZ overseas the operations and disputes between custmers and banks (even shutting down zipit for some banks if its not working. Or the Swipe into Ecocash which was almost shut down recenlty). The DPC acts as the insurer for customers as well. ALL DEPARTMENTS ARE UNDER GOVERNMENT. So how is the perfomance of banks not a governement issue or how is banking devorced from investor confidence thus the Open for business foolishness

        Zimbabwe on the Ease of Doing business index perfoms in the last 5 or so in Africa. An investor wanting to come in and do business has to face the same headaches mentioned above whether Zimbabwean or Foreing. The Registry of companies is agovernemnt department again. So much needs to be aligned there in terms of cost and ease of getting down to business.

        I can go on and on. But bottomline is you dont invite people to your house before you clean it up. and that is the responsibility of ED and his Old guard

  3. Flawed says:

    Techzim be realistic money is not patriotic… He invested money because the returns are much bigger than elsewhere but that comes with a much bigger risk… As golix will soon find out there’s not that much demand for bitcoin outside zim in Africa. That’s why he gave his all because there’s no way they can SA for example. Ask Econet they were at one point charging 50c per minute… Furthermore there is demand here for bitcoin because of RTGS…. Which in other countries there is not… So it’s not going to work outside zim…

    1. cd says:

      I think you are miss informed “Flawed”, Zim is not the only country in Africa that was using bitcoin, Its already popular in SA, Kenya, botswana etc and it has shown to have many use cases to different people across africa. The demand for bitcoin is not just about rtgs but it making it easy to trade across boarders irregardless of a failed economy.

      1. Sagitarr says:

        What you euphemistically call “to trade across boarders” is called forex externalisation in Zimbabwe and it is a crime.

    2. Ra's al Ghul says:

      Your ignorance shall be your downfall. In SA, the volume of Bitcoin traded by one exchange in one day is equivalent to the volume traded by golix in one month. The demand for Bitcoin is bigger in other African countries outside of Zimbabwe.

      1. Sagitarr says:

        The higher the demand for bitcoin trading the higher the risk of failure or loss or running into a “scam”. In RSA 27000 people (and still counting) who invested at least R16k to R1.4m each, including Australians were ripped off in the BTC Global bitcoin scam….
        Where bitcoin is concerned, “ENTER AT YOUR OWN RISK” … this is why reserve banks are banning these crypto companies, it is difficult to differentiate between a a bona fide company and a scammer.

    3. Leonard Sengere says:

      Cryptocurrencies are not for everyone. The risk involved is just too much for some to bear. The naysayers couls be right and we might wake up to see the ‘bitcoin bubble’ burst.

      However, whether or not you believe in them, it should be easier to do business in Zimbabwe. Ranking 159/180 in ease of doing business is just a joke.

      All this talk about returns being much bigger in Zimbabwe is unfounded. I think it has to be said – Zimbabwe is not an attractive market. High taxes, burdensome regulations, unpredictability, low income residents etc

  4. arseoles you r says:

    ah soles @ techzim again !

  5. MacdChip says:

    On bank accounts opening, l agree, but again its the way we Zimbos value and see ourselves. We trust word of mouth and eversince the country got independence, there was zero effort to naturalise the economy so that it reflects our way of living.

    Banks are regulated and follow international standards to operate in global economy.

    Now, be honest people, how many of you have proper paperwork to prove your address where you claim to be residing? What of income?

    Without that, banks anywhere around the world will hesitate to do business with you or open personal account.

    Dont just be cry babies!!

    On crypto currency, l reserve my comments!

    1. Leonard Sengere says:

      This is why mobile money services like EcoCash are taking off across Africa – it’s easier to open an account. Cryptocurrencies are also filling the void – the so called unbanked. Banks and their regulators have to learn to adjust their ways, the blame mostly falling on banks. They still operate under the assumption that everyone is trying to engage in criminal activity.

      When Steward Bank launched their iSave account we saw that the regulators are actually okay with innovation. That account was easy to open. The other banks then followed suit offering their own easy-to-open account – NMB Lite etc.

      So no, I don’t think we are being cry babies. We are just demanding change.

      1. MacdChip says:

        Banking is a heavily regurlalised industry. Have you ask yourself what can you do with lite version of bank account?

        This is where crypto currency are popular, its decentralised and no heavy regulation.

        If crypto is so special and opposite of banks( which is the reason they were born in the first place, to free themselves from heavy regulation and central control) why is it now crypto wants to work through banks?

        Stay independent and free from “corrupt” central banks full stop. Kuda kudya zvevapfupi nekureba

  6. purpledragon says:

    I feel this article is more like cannon fodder, Its full of half truths. It just there to get views but doesnt give the reality on the ground. Let me deal with it point by point.
    1. Registering a company: I will admit the Company Registrar doesnt shine as the best Government Department, but saying it takes 6 months to register a company is an overstatement. I have worked for a law firm, and a company would takes us a month or month and half if u did it without greasing an cogs in the machinery. But if greased, it took at most 2 weeks. If he paid an agent and he failed to deliver, it means agent akadya mari yako before aita basa.
    2. Bank Account: I have personally dealt with Barclays, POSB, BancABC and various other banks including defunct ones. The only one I know that did not open accounts was Standard Chartered. Otherwise, for everyone else having the necessary paperwork was the key. At the most it would take a week. The thing that would usually delay me was the collecting the necessary paperwork from my bosses such a proof of residence or passport photos etc. As for the directors, it was complicated by the fact, i did not interact on with them on a daily basis. So i had to them without seeming as buggy(considering they cld fire me on the spot). But once that was done and the bank had carried out its check, I got the account number
    3. As for RTGS and other transacations, once i had the indeminity signed, it was smooth sailing as long as my banking instructions were signed. When we got e-bank it got even better. A basic tip is Cabs inowandirwa but their internet banking was so phenominal, I prefered doing paying from their account.

    As for being a crypocurrency business, I really doubt that would have been an impediment at the start of the year in opening an account. From what the styx guy is saying, I beleive it was his administrative setup that was the problem. He simply failed to adapt to the system efficiently. Going to any other country wont mean he will have a better chance. He should first refine his company setup, his administrative controls and delegation of duties, before blaming the environment.

    1. MacdChip says:

      Zimbos hate paperwork, full stop!!

      The moment you ask for paperwork, even simple ones they are quick to reach their pocket and grease your palm before they even ask what sort of paperwork is needed

  7. Technology says:

    Our RBZ is not certain when it comes to regulating cryptoes, this is a huge drawback to both companies utilising blockchain technology as per crypto exchange use cases and to the generality of the public of Zimbabwe. but Zimbabaean companies are really innovating in the blockchain space, recently anothern Zim startup launched an exchange platform that is entirely on a mobile platform. The mobile platform , Bash Wallet which is available on android devices for now whilst other platforms are coming soon can be download from this playstore link https://play.google.com/store/apps/details?id=codel.bash.app. Bash Wallet is a product developed by a software development startup called Codel Systems and they are planning to release ERC-20 soon ans well as producing crypto backed electronic cards for international payment. you can buy/sell cryptoes with ecocash, telecash and zipit.

    1. MacdChip says:

      Explain to me how you can regulate something which was created from the first moment to be free of regulation from central banks?

      Its main selling is free from central banks like RBZ, thats why anyone can join and be what they want to be in crypto world, its decentralised!!

  8. John Tranos Matukutire says:

    Cryptocurrency is a popular trading platform that pose risks to investors. Having lost money to IQ Option myself, I find it important for regulatory framework for the platforms. It is inexcusable behaviour by local banks to make account opening a privilege. Back to my experience with IQ Option and e Wallet Skrill, my investment account was frozen for “suspicious activities ” that were never defined to me by these entities. I was shifted back and forth between the entities till I simply gave up. Instead of just making it difficult for cryptocurrency exchanges the regulators must provide a legal and financial framework

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