EcoCash chief operating officer Munyaradzi Nhamo said the partnership with OK Zimbabwe would offer customers more convenience, save time and remove barriers to cashing-in and cashing-out money in the country.
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EcoCash Holdings results show resilience amid a tough business operating environment

EcoCash Holdings Zimbabwe has reported a 26% increase in the group’s revenues in its consolidated financial statements for the year ending February 28, 2022. The listed digital and financial technology company’s inflation-adjusted revenues rose to ZW$29.9 billion, up from ZW$23.8 billion recorded in the previous financial year.

The company today reported a ZW$1.3 billion profit after tax, a turnaround from a loss position of ZW$1.7 billion recorded in the corresponding period in 2021. But company’s Chairperson Sherree Shereni said the growth of its flagship mobile money business EcoCash had been severely constrained by excessive regulations in the country.

“The growth of our mobile money business has been severely constrained due to regulated transaction limits, regulated tariffs, and the continued suspension of some of our revenue-generating services,” Shereni said in a statement accompanying the results.

To date, mobile money subscribers in Zimbabwe are limited to ZW$680 000 per month (roughly US$1 700 a month at interbank rate) compared to bank depositors that can swipe for up to ZW$1.5 million per day (roughly US$3 856 per day). This has forced many people to resort to cash transactions, further negating the financial inclusion gains made in the last 10 years.

The depressed mobile money transactions in Zimbabwe are in contrast to mobile money transaction trends in the rest of Africa, which grew by nearly 40% in 2021 to US$701.4 billion, making up 70% of global transaction values which, according to the GSMA’s 2022 State of the Industry Report on Mobile Money, hit US$1 trillion for the first time ever in 2021, Shereni noted that despite operating in an increasingly difficult environment for the greater part of the year, with the sharp depreciation of the local currency and rising inflation, EcoCash Holdings business units remained resilient.

“The fintech businesses remained the largest contributor to revenue at 80%, up from 77% in the 2021 financial year,” she said. EcoCash Holdings’ fintech businesses consist of EcoCash, the mobile money business, and Steward Bank, the group’s digital banking unit which contributed 26% to the group’s revenues.

In its audited financial statements for the year ended February 28, 2022 published early this month, the bank reported a 73% jump in net operating income to close at ZW$7.5 billion, up from ZW$4.4 billion reported in the prior year.

The bank reported inflation-adjusted profit before tax of ZW$1.8 billion, a turnaround from a loss position of ZW$1.4 billion reported in the comparative period last year as efficiencies achieved through its core banking system upgrade and digital transformation drive began to bear fruit.

Steward Bank was also among the first banks in Zimbabwe to comply with the US$30 million capitalisation requirement by the Central Bank. Shereni said the Insuretech business contribution was 14%, a marginal decrease from the prior year’s 15% while platforms business Vaya Technologies closed the year on a contribution of 6% to overall group revenue.

“Management will continue to adapt business units’ operating models to both grow and diversify
sources of revenue,” Shereni said. The group’s margin for earnings before interest, taxes, depreciation and amortization (Ebitda) improved from 15% to 18% in the period under review, due to management’s relentless focus on cost optimization.

Shereni said EcoCash Holdings will remain focused on revenue growth, operational efficiencies, and optimization of the balance sheet.
“During the year, 22% of the debenture holders exercised their option to redeem their debentures early, in line with our balance sheet optimization strategy. Foreign currency exchange losses reduced from ZW$6.3 billion in 2021, to ZW$1.2 billion during the current year,” she added.

Going forward, the company would continue to drive financial inclusion by leveraging its robust digital platforms, new technologies and strong channel partnerships.

“Our diversified group will continue to produce cutting-edge inclusive solutions and will expand our fintech solutions to agriculture, education, healthcare and financial services through the adoption of artificial intelligence (AI), big data, blockchain and machine learning,” Shereni said.