CASSAVA Smartech Zimbabwe Limited (CSZL) reports that its mobile money transfer subsidiary, Ecocash has registered an 11 % transactional value decline in the wake of stricter operating regime imposed by the central bank recently.
Between April 2020 and September 8, 2020, the Reserve Bank of Zimbabwe, through its subsidiary, the Financial Intelligence Unit issued a total eight directives targeted at the Ecocash platform.
These included reductions in transactional limits, suspension of agent lines, directive to integrate on the Zimswitch platform, among others measures.
The RBZ defended the directives arguing they were meant to block illegal foreign currency dealers from abusing the platform by increasing parallel market exchange rates and derailing government’s efforts to stabilise the economy.
The period after the implementation of these directives has been marked by both price and exchange rate stability.
However, in a trading update released this week, CSZL chairman, Charmaine Daniels revealed the directives issued by the regulator have impacted on the group’s operations.
“The nature of transactions processed on the Ecocash platform, which are high volume and low value have seen the value of transactions processed on the platform going down to about 19% of the total value processed on the National Payments System down, from 30% in the prior year.
“Ecocash revenue contribution has been reduced, both as a result of macro-economic factors referred to above,” she said.
The group also witnessed subdued growth at Steward Bank due to the harsh macroeconomic environment effects worsened by the Covid-19 pandemic period.
Daniels said the mentioned conditions affected customers’ disposable incomes resulting in lower active customers and lower transaction volumes, compared to previous periods.
She committed to fully comply with regulations while implementing business plans which are focused on responding to customer needs as a way of increasing revenue, containing costs and sculpting operations in order to respond to changes in our regulatory and macroeconomic environment.
“Our business model, with innovation at its core, will remain the cornerstone of ensuring sustainability in the current challenging economic environment,” she said.