Ecocash Holdings targets US$ denominated transactions

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By Alois Vinga

LISTED mobile money transfer platform, Ecocash Holdings Zimbabwe Limited (EHZL) is set to increase US$ denominated transactions in response to current economic dynamics.

The development comes at a time when the circulation of foreign currency in conducting formal transactions is on the rise.

In an update Tuesday, EHZL company secretary, Charmaine Daniels said the strategy will be hinged on the group’s digital platforms.

“In the quarter under review, we have focused on growing the Mobile Money United States Dollar transactions distribution footprint across the country. The growth has greatly improved customer convenience and physical accessibility to our financial services for United States Dollar transaction volumes.

“We expect this trend to continue as we drive to digitize the United States Dollar cash economy which has continued to grow,” she said.

She said the reduction of Intermediate Money Transfer Tax (IMTT) on domestic money transfer transactions from 4% to 2% effective 1 January 2023 is expected to further accelerate the adoption of United States Dollar digital money transfer services.

As the market has increased usage of the United States Dollar, the company has seen a drop in the volume of local currency mobile money transactions in the period compared to prior year.

She said during the period ended November 30 2022, the Banking unit registered a 56% growth in Mobile Banking Volumes in the 3rd quarter against the same period last year.

Interest earning assets recorded an upward trend buoyed by an aggressive drive to grow the foreign currency loan book particularly for the corporate sector with Point of Sale transaction volumes dropped by 27% confirming the increase in United States Dollar cash transactions in the economy.

In the Insuretech Service sector, short-term insurance business was able to sustain its revenue performance over the 3rd quarter period, compared to the previous year with the business also recording a lower claims ratio compared to the same period last year.

“The life business has continued to innovate and re-invent itself with several new value-adding products that include the “Dura Pension Scheme”, “Data Life Cover” and the United States Dollar package to grow revenues despite declining disposable incomes.

“We are pleased with the increased adoption of United States Dollar packages that allow the business to enhance life cover through assured United States Dollar benefits,” added Daniels.