By Alois Vinga
CASSAVA Smartech Zimbabwe Limited’s subsidiary, EcoCash’s revenue contributions to the group continue to dwindle following recent operating measures effected by the Reserve Bank of Zimbabwe (RBZ) to curb the platform’s abuse by illegal money changers.
In a trading update issued by Cassava, it states transactions processed on the EcoCash platform went down to about 19% of the total value processed on the National Payments System.
This is down compared to the 30% recorded the previous year.
Presenting the company’s performance for six months ended August 31 2020, the company’s chairperson Sherree Shereni said revenue contributions from the business unit had also dropped compared to a similar period in 2019.
“EcoCash revenue contribution, at 63% compared to 73% realised last year have declined, both as a result of macro-economic factors and regulatory changes that took place during the period under review, as well as contribution from the exponential growth in the Insurtech and ODS business units,” she said.
The EcoCash platform was severely impacted by a series of measures implemented by the RBZ early this year.
Between April 2020 and September 8, 2020, the RBZ through its subsidiary, the Financial Intelligence Unit (FIU) 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.