Econet banks on technology
Mobile operator Econet Wireless is venturing into the financial services sector after the success of its money transfer service Ecocash and its reported acquisition of a stake in TN Bank.
Deputy Prime Minister Professor Arthur Mutambara said Econet stood to become the biggest bank in Zimbabwe through Ecocash.
"If we are talking about how technology will transform our lives, Econet is set to become the biggest bank in the country," Mutambara said.
"The reason is that only 20% of our people have access to a brick-and-mortar bank."
About 80% of Zimbabweans do not have bank accounts because of factors which make it difficult for them to have a steady income.
Many people have also carried over a distrust of the banking sector, based on the dark days of the Zimbabwean dollar.
Econet's CEO Douglas Mboweni told an investment forum this week that Ecocash had been an enormous success, boasting of more than a million subscribers within only six months.
Ecocash's popularity rides on Econet's subscriber base, with more than 6.4 million users.
The money transfer facility boasts low rates.
It targets the low-end market, in which people do not have mainstream bank accounts that prescribe certain minimum balances and charge bank levies.
Mutambara added that mainstream banks should draw lessons from Econet.
"There is a lot of money to be made by investing in the poor," he added.
To further assert its position in the financial services sector Econet has bought into TN Bank with a $20-million dollar injection.
This will automatically propel the bank to the top five in Zimbabwe once the deal is finalised.
The relationship between Econet and TN Bank can be traced back to the time when Econet launched Ecocash and used TN Bank as its agent.
Nyambirai and Strive Masiyiwa business relationship
Meanwhile, TH Holdings founder and chief executive, Tawanda Nyambirai has insisted that he is “his own man”, dismissing speculation that he was a front for thenon- telecoms business interests of South Africa-based mogul, Strive Masiyiwa.
Nyambirai founded TN Financial Holdings in 2001 and engineered the group’s listing on the Zimbabwe Stock Exchange in 2010 through the reverse take-over of furniture manufacturer and retailer, Tedco Limited.
In addition, Nyambirai also chairs the Zimbabwe operations of Masiyiwa’s Econet Wireless while the telecoms entrepreneur has also become a key shareholder in the fast-expanding TN Holdings.
However, while admitting that it would be an honour to be a “front” for Masiyiwa, Nyambirai insisted that this was not the case.
“If there is anybody I would love to front for it is Strive Masiyiwa … it would be an honour,” Nyambirai said in an interview.
“Masiyiwa (is) an honest, generous, kind and humble man. He declared that his first (Econet Wireless) dividend after profit would go to charity and when he realized it he did just that and I personally distributed the money and would manage it for him and give it to charity so I know he kept his word ... he has educated over 40 000 orphans in Zimbabwe.
“So for people to say I am a front for him is a compliment and a privilege! But he is a shareholder and he is known and cited everywhere in the records as a shareholder at TN.
“People who do fronting deals do not do that. They are unknown in the background as the fronts play the role of owner. He would have been in the shadows.”
Nyambirai said Masiyiwa became a key shareholder in TN Holdings after the Reserve Bank of Zimbabwe (RBZ) ruled that bank executives could not be controlling shareholders of institutions they are supposed to be running.
“When the RBZ said I should dilute my shareholding I asked myself who the best person to partner with would be and I thought ‘Strive!” Nyambirai said.
“I was humbled and honoured when he had the confidence in me and my business to buy the shareholding. I am my own man and I have a shareholder in Strive whom I greatly admire!”
He also said TN Holdings was awaiting regulatory approval for the establishment of a cattle bank, a first for Zimbabwe. The proposed bank would allow farmers and individuals to use their stock as collateral when accessing credit.
“At the moment we are moving through the regulatory corridors,” he said.
“Steps are being taken, we have people all over the country talking to people, telling how they view it if we launch a cattle bank and the outcome is amazing.
“What is overwhelming is that it is not only rural people who are enthusiastic about the idea but also urban people.
“We have people living and working in the city who also have cattle in their rural homes as wealth and assets and they are very interested in the concept.”
Nyambirai said although significant progress had been made in improving operating conditions for business, the lack of liquidity remained a huge challenge.
“We operate in an environment and the major characteristic is illiquidity. We are operating in an illiquid market and whatever we do, we have to deal with that challenge,” he said.
“The way it affects us is there is more demand for credit than cash and very little cash is available. We have had to come up with strategies to deal with that problem and we seem to be winning.” Plus timeslive