ECOCASH Holdings Zimbabwe Limited, formerly Cassava Smartech Zimbabwe Limited, has bounced back to profitability, reporting a ZW$938 million profit after tax in the half-year to August 2021, in historical terms, compared to a loss of ZW$1,6 billion in the same period last year.
The solid performance by the financial technology group comes after it endured a tough 2020 due to the coronavirus crisis.
Mrs Sherree Shereni, the EcoCash Holdings chairperson, attributed the better-expected performance to revenue growth, reduced exchange losses and effective cost reduction initiatives that started last year. “The group’s revenues increased by 36% in inflation adjusted terms to ZW$11 billion compared to the same period last year, driven largely by an increase in transactional volumes for the Fintech business units.
“The Fintech business remains the largest contributor to revenue, constituting 80 percent of total revenue,” she said in a statement accompanying the financial results.
“Management continues to focus on revenue diversification as a strategy for revenue growth,” she added.
In inflation-adjusted terms, the Zimbabwe Stock Exchange-listed group narrowed its loss from ZW$2.4 billion in the half-year to August 2020 to ZW$662 million.
In the same period, the company’s assets increased by 24% to ZW$37,8 billion, while earnings before interest, taxes, depreciation, and amortization (Ebitda) shot up 61%, to ZW$2.5 billion.
Mrs Shereni noted that the company’s flagship brand and Zimbabwe’s largest mobile money platform, EcoCash, continues to play a critical role in helping millions of citizens to participate in the formal banking system.
Before its introduction to the local market in 2011, less than 30% of the country’s adult population had access to banking services. But today, more than 90% of Zimbabwe’s eight million adult population use EcoCash.
“As we celebrate the 10th anniversary of the mobile money business, we reflect on the key role that the business has played in driving the financial inclusion agenda in Zimbabwe.
“EcoCash continued a steady growth trajectory with transaction values and wallet funding on the upward trend, compared to the same period last year at 25% and 54%, respectively,” she said.
EcoCash Holding’s banking arm, Steward Bank, saw its lending strategy yield positive results as the 127% growth on the loan book from February 2021 spurred the bank’s 795% growth in interest income, compared to the same period last year.
“The completion of the core banking system upgrade, in line with the acceleration of our digitisation focus, has resulted in improved customer experience and has created capacity for the development of innovative products in the future,” added Mrs Shereni.
In line with the group’s focus on financial inclusion, EcoCash Holdings’ insurtech businesses implemented various initiatives to reach previously uninsured communities.
Mrs Shereni said following the group’s revenue diversification strategy, insurtech business revenue contribution grew from 14%, in the same period last year, to 19% on the back of the growing strength of the company’s short-term insurance corporate book.
In the period under review, Econet Life was honoured and recognised for being the most innovative insurance company at the 2021 Insurance Company awards.
“Vaya Technologies continues to grow its operations on the back of growth in the agricultural sector. The growth in the Healthtech revenue was spurred by our response to the demand for health services during the period due to the Covid-19 pandemic.
We will continue to create the capacity to be able to respond to health needs,” said Mrs Shereni.