Mobile money accelerates financial inclusion in Zimbabwe

By Ngonidzashe Katsamba



According to the FinScope survey done by FinMark Trust, a South African research company, 48% of Zimbabwe’s population was financially excluded at the end 2012. FinMark MD, Maya Makanjee said that financial exclusion was particularly high in the rural areas, possibly due to limited access to banks and formal salaried employment. While every second Zimbabwean in urban areas was banked, only 12% of adults in the rural areas had commercial banking products in the same period. On the other hand, the countries mobile penetration was sitting at 104,4%, translating to approximately 13,6 million mobile phone subscribers in the country in March 2014. 

Zimbabwe’s mobile operators saw this opportunity and took advantage of this situation by coming up with Mobile money services. A service so disruptive, it is accelerating Zimbabwe’s financial inclusion and giving traditional banks a run for their money. In June 2013 Econet reported that more than US$1.5 billion had been moved through the EcoCash platform from inception in 2011. In January 2014 Econet with a total subscriber base of 8.5 million also claimed to have 3.5 million users on their EcoCash money transfer platform whilst Netone’s One wallet money transfer service experienced a 2000% increase in transaction volume since their re-launch in November 2013; Netone is the 3rd largest operator with approximately 2 million subscribers. Telecel on the other hand launched its Telecash money transfer service in January 2013 and they are expecting 1.6 million users in the first 6 months of launch.

These changes in the financial sector have obviously not gone down well with most local banks. Estimates show that cash circulating in the informal sector is equivalent to the amount of deposits in the formal banking sector which stood at US$4.41 billion at the end of December 2012. Banks are keen to get their hands on this money to boost transaction fees and deposits but as it stands mobile operators are more likely to beat them to it.     

Uptake of mobile money in Zimbabwe has been so impressive due to the following factors:

Factors influencing growth of mobile money

Mobile money has a wider reach

No bank has had a distribution network, ATM’s included, as wide as Zimbabwe’s mobile money system. In a mobile money transfer system agents are a very important aspect as they receive and disburse cash sent through the systems for a commission. At the moment EcoCash has 6000 agents whilst Telecash has 2,600 agents dotted across the country. This network allows subscribers to send money anywhere in the county with a guarantee that it will reach its destination. Of late the number has grown so much that the agents have formed an association, the Mobile Money Transfer Agents Association of Zimbabwe (MMTAAZ) to bring together agents facilitating mobile money transactions, to advance their interest and lobby for inclusion in policy making. 

In past years a wide network of agents has been used by bigger players as a competitive advantage, but in February 2014 the RBZ issued a directive to ban "exclusivity agreements" within the telecommunications sector in which some companies had barred agents from working with rival firms. This opened up the market and allowed smaller players to catch up at a faster rate. 


Considering the country's liquidity crunch, mobile money has ushered in a new convenient way of doing business. With current mobile money services you can now send and receive money, pay for groceries in retail outlets, pay for public transport, make newspaper subscriptions, buy airtime, pay utility bills like water bills, rent, satellite TV in the absence of  hard cash. Most recently EcoCash introduced EcoCash Save which allows you to save any amount of money and get zero percent interest loans after 3 months. EcoCash has also gone the extra mile by allowing companies to pay salaries through mobiles. According to Econet officials EcoCash saw an 82% increase in the number of companies using EcoCash Payroll in January 2014 amid “liquidity problems” facing banks in the country.

Recently Telecash integrated with the Zim-switch platform used by local banks to interlink their systems, a move which allowed customers to move funds freely between their bank account and Telecash mobile money account.  To add to this convenience, mobile money has also eliminated the infamous paper work associated with applying for a bank account. A very welcome development in a country which has more than 50% of its population unemployed.

Mobile money is cheaper

The mobile money transfer service sector has become lucrative in Zimbabwe, especially on the back of bank charges that are considered high. Zimbabwe’s banking sector has been depending on bank charges for survival of late, which has made their charges obscenely high. According to a report by the Zimbabwe Independent, Zimbabwean individuals and corporates are forking out between US$25 to US$50 per month in bank charges. Figures obtained by business digest from commercial banks in 2011 showed that an individual is charged between US$1 and US$5 for a single withdrawal, while companies pay up to US$9 whilst the regional average is $US2 for individuals and US$6 for companies. Banks are also charging as much as US$20 for a single deposit of bank notes transaction. On the other hand the minimum fee to transfer money using mobile money services is US$0.09 and the maximum you can be charged  for sending the maximum amount is US$4.95 for registered customers. Also, interest on loans from banks can be as high as 25% whilst EcoCash recently launched EcoCash loans of up to US$500 at zero% interest.  

Easy accessibility

Opening a mobile money account on any of the operators in Zimbabwe is free and all you need to start using mobile money services in Zimbabwe is a basic mobile phone; it doesn’t even need to be a smart phone. Compare this to opening a bank account for at least $25 and filling in a heap of forms. Through the use of USSD codes mobile operators have managed to open up mobile money services to all cell phones and with the cheapest mobile phone retailing for US$15 including a solar charger, everyone can use mobile money. 

Mobile money could mark a new economic era for Zimbabwe, an era in which everyone has access to quality affordable financial service. Now is the time for banks to act before they get pushed off the playing field with their eyes wide open.

Ngonidzashe Katsamba is a passionate Telecoms marketer who holds Honours in Business studies from the University of Zimbabwe, an Advanced Diploma in Telecommunications and Digital networks engineering from City SND Guilds UK, a Professional Diploma in Marketing from CIM (UK) and is currently work towards Chartered Marketer status. Ngoni has been working in Zimbabwe’s Telecoms industry for the past 5 years and he has seen Zimbabwe’s Telecoms industry consumption from purely voice to a mixture of voice and data with data on the growth trend.