EcoCash to start offering loans to subscribers

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ECONET Wireless on Monday said its mobile savings platform, EcoCashSave account holders will soon be able to borrow money from the service as the company intensifies its efforts to tap into the unbanked population.
“This is part of what will be called EcoCashCredit that Econet is planning to roll out early in the New Year,” chief executive, Douglas Mboweni said in a statement.
He said borrowing fromEcoCashSave, launched last month, would include loans for school fees and housing and would be done through partner banks including its own bank, Steward Bank, which is hosting the accounts.
Further details of the project would be revealed next year, Mboweni said.
The savings accounts which are open to subscribers on the mobile money transfer service, Ecocash, allow subscribers to save as little as one dollar without any charges and attract interest of four percent per annum.
The savings platform has seen its bank accounts swell to 900,000 compared to 850,000 held by all other banks.
Zimbabwe has an adult population of 7,4 million but only has 853,000 bank accounts.
The Ecocashmobile money transfer platform, which was launched two years ago, now has 2.7 million subscribers.
Zimbabwe’s bank crisis of 2004 – which saw the central bank forcing several financial institutions to close – and the country’s hyperinflationary phase when inflation reached a staggering 500 billion percent in December 2008 left confidence in the financial system at an all-time low.
It is estimated that $7.4 billion is circulating outside the formal banking sector due to high bank charges, high security risks and a declining saving culture.
Total bank deposits are around $4 billion, according to central bank figures.Advertisement