HARARE – Each week, Shingirirai Kativhu sends about $35 to his wife, who is raising their four children in a far-flung village in eastern Zimbabwe.
But Kativhu cannot afford a bank account and has lost some money sending it through bus services, so he sends the cash using his mobile phone.
Kativhu, who sells various artefacts along Harare-Bulawayo Road, is part of a micro banking revolution that is sweeping Zimbabwe’s high density suburbs and rural areas.
EcoCash, a mobile money facility by Zimbabwe’s largest telecommunications services provider, Econet Wireless, has become the cheapest and most secure way of transferring money in the country.
Its popularity with the lower class has spawned to previously unbanked areas and financially excluded people in Zimbabwe.
“Before, I would send money with the bus company,” said Kativhu, a short man with a cleanly shaven head and a bushy beard.
“Sometimes the bus conductors would tell me funny stories about how they would have lost my money. With EcoCash, once you send it, the money is immediately there.”
Kativhu recently walked into an EcoCash agent operating out of a small corrugated metal kiosk in Kuwadzana.
He removed two crumpled $20 from his trousers’ back pocket and handed it to the agent who sent a text message through to his wife in the eastern village of Chikwizo in Mutoko.
A minute later, he called his wife and told her to collect the money from an EcoCash agent on her end.
Econet launched EcoCash two years ago and already there are more than 1,7 million registered users.
The service allows customers to transfer up to $1 000 per day, although the average transaction is only $30.
Still, EcoCash moves $2,5 million each day in this country where almost every rural household has a family member working in a city and sending money back home.
Hundreds of EcoCash agents across the country offer banking services to people in remote villages and high density areas, places traditional banks have not penetrated.
Econet chief executive Douglas Mboweni said the arrival of EcoCash means that the millions of Zimbabweans without access to traditional banking services will now have the ability to send and receive money, without first having to travel to the nearest bank.
“You will not find a bank at every corner of the country, but, thanks to the extensive coverage we have built over recent years, mobile phone access has spread to virtually every corner of the country,” said Mboweni at the launch of EcoCash adding that sending and receiving cash will now no longer take days, it can now be achieved virtually instantly.
“The success of EcoCash is down to first mover advantage and differentiation. Where banks are doing little to give more value to consumers, EcoCash is stealing the scene by engaging with customers, providing a convenience and practical consumer proposition,” said MBA graduate Natalie Paida Jabangwe who spent the better part of 2011 trying to sell mobile technologies to Zimbabwean banks.
“Consumers can pay for the kombi by EcoCash, something my bank card or cheque does not facilitate. Soon people with be paying for goods by it too,” wrote Jabangwe in a paper urging banks to diversify.
“First of all, it is important to understand that the mobile financial services sector is a nascent market. This means that the market environment is in an early stage of formation characterised by an undefined industry and unclear product definitions where pioneering firms enter the market with various products and new competitors are inspired to expand the market further through process improvement or unanticipated product versions.
Inevitably, the application of the mobile phone in the financial services industry has created an opportunity for interaction with the financial sector by various stakeholders in a way that traditional financial services have never done before.”
Rumbidzayi Motsi, a second-hand clothes vendor at Mbare’s Mupedzanhamo market stall used to carry around her cash, but would frequently lose the money in an apartment she shares with her four friends. Now, she keeps her money with EcoCash.
“I use EcoCash like a bank,” she said. “I keep my money with them so it doesn’t get lost.”
Econet has engaged over 500 EcoCash agents countrywide, providing employment to small businesses in some of the country’s most remote areas.
Post Offices have also been registered as agents and discussions are on-going with the major retail chains.
Mobile money transfer services have significantly stimulated economic activity in other African markets, especially in East Africa.
In 2010 alone, some 14 million Kenyans transferred $7 billion across their country through mobile money transfer.
Besides providing those with limited access to financial services a way to make safe, secure transactions, EcoCash has now also managed to create a seamless link into banks, allowing customers with bank accounts the ability to move money into an electronic wallet, from anywhere in the country.
Cuthbert Tembedza, EcoCash’s new chief executive this week said with such partnerships, Econet is addressing the problem of the last mile to enable more coverage for banking services.
Tembedza added that Econet would like to just focus on the infrastructure issues to facilitate banks to do “what they do best”, banking.
CBZ Holdings group chief executive John Mangudya said the impact of EcoCash is yet to be felt by his bank, which partnered Econet late last year.
“It’s too early to say. For instance look at Mukuru.com., if you had asked me its impact three years ago I wouldn’t have given you a convincing answer.
“Currently Mukuru.com is doing well to the extent that we had to provide branches exclusively for it due to high demand,” he said. – John Kachembere