EcoCash bureau de change launch to spur financial inclusion in Zimbabwe
By Sifelani Tsiko | 01 Sep 2019 at 21:14hrs
THE recent launch of a bureau de change by Zimbabwe's leading mobile money service provider EcoCash after approval by the country's central bank is likely to help channel more remittances through formal channels and promote financial inclusion in the country.
With a customer base of about 10 million, this means that EcoCash, a subsidiary of Econet Wireless Zimbabwe group, will instantly dominate the bureau de change market share surpassing the combined transactions of more than 200 other licenced agencies countrywide.
Natalie Jabangwe, chief executive of EcoCash says the launch of the bureau de change will make transfers easier, much less expensive to deal with and promote trading of foreign currency in a safe and convenient way.
"We are introducing to you what will become the largest bureau de change in the country - EcoCash Bureau de Change," she says.
"It's the world's first largest bureau de change, and we are offering it to you on your mobile phone. You can check rates on your phone right away, sell your US dollars in real time and get your money in real time.
"Customers will be able to check the rate of the day, get a quote for the amount to be sold and receive instant 'confirmation of sale' of foreign currency and the ZW$ conversation amount - all this happening via their mobile phone."
EcoCash Bureau De Change, hit the market with an opening rate of $10,80 to the United States dollar, a move which was likely to see many Zimbabweans using the platform to reduce risk and rip offs on the illegal foreign currency market.
Econet Wireless, the country's leading mobile phone operator launched EcoCash in 2011. This unit, which now enjoys a 99 percent share of the mobile money market and the bulk of electronic payments, developed the latest innovative product in 2017 before it was launched this week.
Foreign currency money transfer service will now make it possible for Zimbabweans to receive money on their mobile phones instantly and convert it to the Zimbabwe dollar through the EcoCash platform. By delivering money via existing mobile money wallet services, many recipients who previously could not access forex financial services can now be able to do so.
Zimbabweans living abroad with a bank account, debit card or credit card will now be able to send foreign currency to their relatives here at home directly to their EcoCash FCA mobile wallet accounts. Transfers made using the EcoCash "Smart Change Money" are credited within seconds to recipients' mobile money wallets.
This eliminates the cumbersome bank route procedure, which requires travel, queuing and other restrictions on time and convenience. "In the last three years, we have been operating in a very volatile environment," says Jabangwe.
"The volatile and rapidly changing environment requires solutions. Instead of debating what people are going through, we are debating on responses to the challenges.
"We are launching the EcoCash Bureau de Change as an innovative solution to the needs of our clients."
Adds Edmore Jojo of Cassava Smartech, another unit of the Econet Wireless: "We are driven by a mantra that life is digital. We scan the environment for areas that require digital transformation.
"We challenge the boundaries of familiarity. We revel in being disruptive to come up with innovative solutions that drive financial inclusion and improve service delivery to our clients."
The country's first mobile bureau de change service model saves customers time and money as they don't need to visit a money transfer agent to send funds home to their loved ones. Using the EcoCash FCA wallet platform, people in the diaspora can now send instant low-cost money transfers at any time to 10 million mobile money users in Zimbabwe.
EcoCash digital payments hub is connected to other mobile wallet systems, banks, money transfer operators and merchants which enables real-time, cross-border and cross-network transactions.
"Before performing a currency conversion transaction, one needs to fund their EcoCash wallet," says Jabangwe.
"You fund your wallet by doing a Cash-In of physical US dollars (or forex) into the wallet. Or you fund your wallet over the counter, at any Econet Shop. You can also fund your wallet through a direct in-wallet receipt of remittances from the diaspora into your EcoCash wallet. This could be through existing EcoCash remittance partners, which include Cassava Remit, World Remit, Mukuru, Western Union, Money Gram, Orange Botswana and MTN."
This is going to revolutionise the way people send money from abroad to Zimbabwe, increasing diaspora remittances and other social and economic benefits.
"For the general public, they now have convenience," says Obvious Runesu, acting exchange control director at the Reserve Bank of Zimbabwe.
"We now have more than 200 bureau de change operators across the country. Competition is building up and we applaud Econet for coming in. The market has been waiting for you. It will now be easy for people to change their US dollars to the RTGS wallet." However, he warned EcoCash to take greater responsibility to protect clients from fraud and other money laundering challenges.
"Take greater responsibility and protect your clients," Runese says. "The RBZ is ready to help train your staff on bank security and money laundering."
The launch of the EcoCash Bureau de Change will certainly help to bring down the costs of remittances into Zimbabwe through leveraging the power of mobile money and digital payments.
In 2018, diaspora remittances contributed US$619,2 million, a decline of 11,4 percent as compared to $699 million received in 2017. The RBZ attributed the decline to complaints by Zimbabweans in the diaspora over inefficiencies in getting their monies from banks and transfer agencies.
Zimbabwe just like most other developing countries has a number of people working abroad, who earn foreign currency and is paying much attention to the issue of channelisation of the expatriate remittance into the formal channel.
It is also concerned about the size and the impact of informal remittances - money transfers, which occur through private, unrecorded and illegitimate channels. It wants remittances to enter into the economy through legitimate channels such as banks, exchange houses and other registered global money transfer agencies. Diaspora remittances play a huge role in improving the country's foreign currency inflows - reducing the trade deficit and covering for essential imports.
According to the World Bank, remittances to Sub-Saharan Africa increased by over 9,6 percent from 2017 to 2018, reaching $46 billion. However, the region is still the most expensive in the world to send money to, with an average cost of 9,3 percent.
EcoCash says it remains committed to supporting financial inclusion across Zimbabwe by enabling the unbanked populations to receive money directly into their mobile wallets, without the need for a bank account.
This launch will also help accelerate Zimbabwe's financial inclusion mission, while expanding the footprint across the country with more affordable and accessible remittance services.
Zimbabwe launched its National Financial Inclusion Strategy in 2016, targeting the underserved and marginalised population. Since 2016, access to financial products for Zimbabwe's marginalised groups has significantly improved following the implementation of the strategy.
Smallholder farmers, small-to-medium enterprises, women and youths accounted for the bulk of the economically active population that still remained financially excluded. But the aggressive promotion of popular mobile money service has significantly improved financial inclusion.
Before the introduction of financial inclusion policy in 2016, there were only 1,49 million bank accounts nationwide, according to the central bank. However, the figure increased significantly to 6,73 million by the end of 2018.
"We have improved access by all the initiatives, we are working on low cost accounts, that is where most of the accounts are being opened, 4,67 million of the 6,73 million accounts are low cost accounts so we are sure its financial inclusion for the marginalised sector is being achieved," a senior RBZ official was quoted saying early this year.
According to a 2018 World Bank Findex survey report, financial inclusion in Sub-Saharan Africa has "increased dramatically" from 23 percent in 2011 to 43 percent in 2017.
The 7,2 million new digital finance users are a 250 percent increase from the 2012 baseline, the organisations said in its report titled: "Digital Access: The Future of Financial Inclusion." Financial inclusion is one of Zimbabwe and Africa's great success story of this decade.
Mobile money solutions and agent banking now offer affordable, instant, and reliable transactions, savings, credit and a whole range of services to previously unbanked populations. And, the latest launch of the EcoCash Bureau de Change, will certainly have a positive impact on digital financial inclusion, and spur the inclusive economic growth and development that Zimbabwe desires.