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Cash shortage hits mobile money services

12 May, 2016 - 00:05 0 Views
Cash shortage hits mobile money services

The Chronicle


Oliver Kazunga, Senior Business Reporter
MOBILE money transfer agencies in Bulawayo have in the past few days recorded low business due to the cash crisis that hit the country in recent weeks.

In separate interviews, some of the agencies from Zimbabwe’s three mobile network operators told Business Chronicle yesterday that their business was low due to limited cash.

The three companies-Econet, NetOne and Telecel run mobile money transfer services called EcoCash, Netcash and Telecash respectively.

“The whole of last week we were operating with limited cash and the business was very low. Like in my case, there are some days that I closed shop because there was no cash for me to transact,” said an EcoCash agent.

“However, as of today the situation has improved as some of us have received the cash from our principals.”

Another agent from NetOne echoed similar sentiments adding that although the situation had improved, the volume of transactions per day were still very low.

“Business hasn’t returned back to normal, this is reflected by the volume of transactions that we’re processing per day compared to days prior to the cash crisis. We just hope that the situation will soon normalise,” the agent said.

A Telecash agent who also refused to be named said: “Due to the cash crisis being experienced, the volume of transactions have significantly gone down. In good days I used to process transactions worth about $250 a day but of late I hardly process $100 a day. I think, this situation isn’t peculiar to me alone, other agents are also in the same predicament.”

Responding to questions from the floor during Zimbabwe National Chamber of Commerce (ZNCC) breakfast meeting in Harare yesterday, Reserve Bank governor John Mangudya said they had released $15 million, which was imported recently to deal with the cash crunch.

“Today, we’ve released the $15 million that we imported to deal with the cash shortage being experienced. And those bank queues that you were seeing are no longer there, but you’ll find out that tomorrow those queues would have resurfaced because there is financial leakage in the economy,” he said.

The Central Bank boss implored business associations such as ZNCC to ensure businesses do not engage in illicit activities that promote financial leakages.

As a short and medium term measure to ease the cash shortage, Mangudya said the monetary authorities is introducing $200 million worth of bond notes guaranteed by the African Export and Import Bank (Afreximbank).

The bond notes, which will be an extension of the bond coins introduced last year to ease the challenge of change that had affected the economy, would be issued in denominations of $2, $5, $10 and $20.

The new bond notes would be indexed at par with the United States dollar and are set to start circulating in the next two months.

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