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Morris Mpala, MoB Capital Limited
FIRST and foremost there are no liquidity challenges in Zimbabwe but cash shortages… period. We pose the following questions as we ask the man in the mirror to change his ways for a better economical environment.

A bank gives you a deposit interest of five percent per annum but charges you five percent per transaction for cash withdrawals. It is also giving you a loan at 18 percent per annum after getting your money at five percent per annum before all other costs that accrue to your account.

If the debts of the bank are not being paid back where do we expect banks to get their revenues from? Doesn’t it initiate lots of “charges” to augment income, which they desperately need to stay afloat? If you keep your money in the bank you will end up owing the bank as your balance disappears due to negative returns and unsustainable bank charges.

Maybe we are over banked, thus profit derivations are charges based as opposed to innovative services or products that do not punish the banking clients as it were. Interest income is the future as it resembles the non conventional approach by the respective bank. Non-interest income resembles a tired, stoic conventional and extortionate approach to banking as it penalises depositors with no other options. And over reliance on this income is causing gnashing of teeth to depositors as banks are not willing to let go of this revenue.

Banks love queues, why not pay enough so that clients don’t come back surely on average a person needs $150.00 hard cash to survive in a month. The effect of reducing charges takes ages but the upward revision is always Nicodemously an over nite event. RTGSs cost more than cash withdrawals then we want to talk about plastic money. Are we serious?

RTGS systems are meant to be instant payment platforms but alas it isn’t but who benefits from the interest accrued on these “hanging funds?” Remember these transactions run into billions of dollars and interest accrues on a daily basis. Internet banking has to be instant otherwise it sort of negates the whole point of transaction from the comfort of your house, office or banking from your phone. If it’s not instant it takes away the convenience because inside banking hall transactions are sort of instant.

Is cash hoarding justified or otherwise it is a trust issue. The need to build confidence and trust amongst all stakeholders is now critical and a very delicate process from all economic actors. Everyone has to be happy from private companies, banking fraternity, fiscal and monetary authorities, Government to the general populace. It’s a balancing act with a win-win approach.

Cash discounts are just but profiteering and goes against the spirit of plastic money use. The plastic money platform is unstable then we want to talk about financial inclusion. Why have so many machines (Point of Sale) instead of integrated POS machines (Zim switch compliant).

Why is POS acquiring/implementation for use by SMEs deterrent by virtue of costs?  POS are a minimum requirement to compete and it’s not a source of income but a tool to ease of doing business so the hiring and usage extortionist’s costs are nonsensical.

Why are ETs, transport sector, tolling system, vendors, home affairs, health & child welfare services not embracing plastic money principle? Fuel stations have embraced it so have fast food chains. We spend time in queues to withdraw cash to go and pay in cash where you could have paid using your debit card or used RTGSs (assuming it’s cost effective.

We do appreciate we are still a cash economy and resistance to plastic money is only natural but do we really need cash in our hands to do some of these transactions and do we really need hard cash forex to transact?

Bond notes alleviate cash challenges to some extent but it’s not the entire holistic solution as most challenges are skewed towards production underlying fundamentals.

Imports will kill us, rob the future of our beloved children, externalise jobs, will deplete our foreign currency reserves especially when there are no meaningful exports to talk about. Mobile money charges, which are in fact bank charges, are ridiculously high the hoi polloi thus prefers cash to these.

What use is mobile money if after all has been said and done you still need to do cash transaction than use it to settle financial obligations with other parties.

Surely do we need to be using US dollars to buy worms, wild fruits, mangoes etc? Am not advocating for Zimbabwe dollar return given fundamentals are still not ideal for that.

The amount of money that is circulating in these informal sectors is huge such that if it’s US Dollars it creates a challenge given inflows are little but outflows are in a biblical deluge due to reasons we have discussed before. Imagine if this money was in formal banking system probably they could have offered better deposits rates.

In addition if the deposits were not transitory in nature, banks maybe then could pay a handsome interest rate. Is mobile money accounted for as total banking money such that it is recorded as money in the banking system thus could be used as lending money otherwise bank deposits are being hugely understated.

The biggest challenge is of importers. If those that have to import do not get foreign currency as and when they want it then the circulation of US dollars will be limited and bond notes will face resistance as to their wider use. Importers need a free reign on access to foreign currency whether its hard currency or nostro based currency.

Most challenges we are facing are inter linked from bank charges, illicit outflows, lower deposits (savings), cash shortages, imports, exports and by and large our general culture towards economic issues.

After all has been said and done the marginalised, the financially excluded, the pensioners, the young will find the environment not ideal as it is harsh to this segment of the population. It now defeats the purpose of embracing financial inclusion through technology.

It will take bold steps, selfless and empathetic transformational business leadership to be as accommodative as possible. It’s not an easy road but with unwavering determination, hope, persistence and smart approach we will achieve financial freedom that we passionately so much desire.

IF YOU LIVE IN BYO PLEASE CONSERVE WATER . IF YOU LIVE IN ZIMBABWE PLEASE USE ELECTRICITY SPARINGLY: SOS (SWITCH OFF SWITCHES) IF YOU LIVE ON PLANET EARTH PLEASE PRESERVE THE ENVIRONMENT

Morris Mpala is managing director of MoB Capital Limited, a Bulawayo headquartered micro-finance institution with footprint across the country.