Mthuli Ncube is said to have gazetted a new financial instrument yesterday that will enable mobile money users to receive interest on the money they keep in their mobile money wallets (i.e EcoCash, OneMoney, Telecash and MyCash).
At inception, mobile money users will get interest rates of about 0.02%/day;
- If you keep a $100 dollars in your mobile money wallet for 30 days you should get 60c
- If you keep it for over 6 months you should get $90 because of Banking (Savings Interest Rates) Regulations which stipulate that if you keep your money in the bank for 6 months and above you’ll get 90% back, according to The Herald.
It seems like the incentive here is for you and me to keep larger amounts of money in our mobile money wallets in the promise of a reward. Let’s raise that $100 to $500 and see what the interest rates look like;
- If you keep a $500 dollars in your mobile money wallet for 30 days you should get $3
- If you keep it for over 6 months you should get $450
The only problem I see with this is that people don’t use mobile money wallets like they do banks. It might take time to change those patterns but once a user puts their money in their mobile money wallet they are about to spend it and not keep it dormant. At least that’s true for me.
Secondly, at present, the incentive to keep the money in my wallet because I hope to get 0.02% interest per day doesn’t seem too attractive to me. The problem with Zimbabwe’s economy right now is inflation. I think it’s fair to say inflation is rising at a higher rate than that 0.02%/day I’m promised – or at least that’s what it feels like as a consumer.
Lastly, because disposable incomes are so depressed it’s hard to see someone opting to leave money in their wallet instead of buying goods and services they need right now.
The best-case scenario could be that the Finance Ministry could be making this decision right now with a long-term view because in the short term it’s hard to see any benefits mobile money users gain by keeping their money in their wallets.
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