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How a mobile phone vendor became Zimbabwe's fastest-growing bank

EcoCash, a mobile money-transfer service, now has a million subscribers. 'There is a lot of money to be made by investing in the poor,' says Zimbabwe's Deputy Prime Minister Arthur Mutambara.

By Erik MandellGlobal Envision / September 24, 2012

A street vendor in Harare, Zimbabwe, waits for customers to buy his cigarettes and cell-phone cards. EcoCash, a money-transfer service that uses mobile phones, may become the biggest banker in the country, where 80 percent of the people don't have a traditional bank account.

Philimon Bulawayo/Reuters/File

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Money is whizzing through the airwaves and cell towers of Zimbabwe, as a mobile cash-transfer system is on track to become the country’s biggest bank.

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EcoCash, a mobile money-transfer service operated by telecommunications company EcoNet Wireless Zimbabwe, has reached a million subscribers in under six months since its launch, according to Mobile Money Africa. EcoCash enables money transfers across all networks between mobile users, a rapidly expanding sector of the Zimbabwean population.

And in a country where 80 percent of residents do not have access to mainstream bank accounts, a service that requires nothing but a mobile phone is a popular and more convenient alternative. Mobile phone users now make up 77 percent of the population, compared to just 6 percent in 2006, reports Mobile Money for the Unbanked. And EcoNet Wireless, EcoCash’s parent company, has that market cornered in Zimbabwe, with 6.5 million customers, which represents 70 percent of the market share of cell phone users, according to Mobile Money Africa.

EcoCash, a mobile money-transfer service, has reached a million subscribers. “There is a lot of money to be made by investing in the poor,” says Deputy Prime Minister Arthur Mutambara.

Within that segment, EcoCash has seen success by targeting the low-end market. Customers don’t need to have bank accounts, and 1,400 street agents throughout the country help make subscribing a quick and easy process. Agents receive a commission when customers total transactions reach $50, encouraging agents to target those likely to be actively using the service.

While the legalization of foreign currency in 2009 has pulled Zimbabwe’s previously plummeting economy out of a nose-dive, it’s also created challenges, including a shortage of change. The "coin problem" can make small transactions difficult to complete accurately, reported the New York Times, and small transactions tend to be the kind low-income users make. But now mobile cash services like EcoCash allow precise payment, regardless of the size of a transaction.

The ease of transactions is just one factor contributing to the skyrocketing popularity of EcoCash. Actual banks are more difficult to access than mobile phones, and the dark history of the Zimbabwean dollar contributed to widespread distrust of traditional banking services, reports the Zimbabwe Daily Mail.

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