New Zimbabwe.com

Econet moves to drive financial inclusion

ZIMBABWE’S largest mobile network this week launched a service which offers micro loans of up to $500 to the informal sector through its mobile money platform.
The loans would be underwritten by Steward Bank, a commercial bank wholly owned by the mobile phone operator, and have a maximum tenure of 30 days, with an interest rate of five percent.
The service would be available to mobile phone subscribers above the age of 18 and are registered on Econet’s mobile payment platform, Ecocash.
EcoCash chief executive Cuthbert Tembedza said the Ecosave platform is currently sitting on $20 million in deposits after opening over one million accounts since its launch last October and has plans to partner other commercial banks.
Steward Bank Business Development and Strategy Executive Lance Mambondiani told The Source that the new service would not increase the bank’s non-performing loans.
The average NPL rate for the financial sector stood at 15,92 percent as at December 2013.
“This service is targeting the low end market. Research shows that the default rate for micro loans is around five percent.
“We know that this product will not make much for the business but would assist the market and promote financial inclusion,” Mambondiani said.Advertisement