Zimbabwe: Cash Shortages Cripple Mobile Money

Money Transfer

The prevailing cash shortages have suffocated mobile money subscribers, who are failing to get their money or do cash-out transactions.

The crisis, which now makes it almost impossible for subscribers to make cash-out transactions even for as little as $5, is a setback to the financial inclusion plan. Mobile money was touted as the key driver to financial inclusion by virtue of its wide network coverage.

A survey conducted by Standardbusiness last week revealed that customers were failing to cash out money they would have received through the mobile money platform as the agents did not have cash to disburse to customers.

A mobile money agent named Peter (not his real name), said his business, like any other business, was affected by the cash challenges prevailing in the country.

"The net effect of that is that it affects our commission because the more transactions that one does, the more the agent earns. Yes, there are some agents who are now double charging customers $2 for every $100 withdrawn in addition to the cash-out charge. So for every $100 cashed out, one is charged $5. This has been happening with EcoCash agents only because they are the ones with a wider network coverage. It's illegal to double charge clients but if customers resist that, they will not be able to access the cash," Peter said

He said that some agents that were connected had become cash barons, selling cash to desperate Zimbabweans.

Standardbusiness heard that support banks which included Steward Bank used to give EcoCash agents cash but they had since stopped as some of the agents were "spinning" the cash and not taking it back to the banks.

"The agents were getting cash from the bank but they were not depositing the money back. They would do Real Time Gross Settlement transfers to their agent accounts and then collect the cash as if they wanted to serve clients and yet they would go on to sell the money to other people," the source said.

In the past, a support bank branch could disburse as much as $300 000 a day to agents.

People in the rural areas have been hardest hit, amid claims that agents were giving subscribers part of their money in the form of groceries.

Econet Wireless Zimbabwe spokesperson Lovemore Nyatsine said the liquidity constraints in the country had not spared the mobile money transfer sector, but said he was not aware that some agents were putting an extra charge on subscribers who wanted to make cash-out transactions. Read the full article in The Standard here: