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.
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Visibility aids EcoCash in its market domination. EcoCash markets its services through advertisements on public mini-buses, known as kombis, in urban areas, and over radio talk shows in rural areas. Widespread marketing helps keep EcoCash ahead of other, smaller competitor. And while some competitors require users to have bank accounts, EcoCash allows customers to bank with just their phone.Skip to next paragraph
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EcoCash modeled much of its strategy off of the success of Kenyan mobile money service M-Pesa, also under the umbrella of a telecommunications company, Safaricom. M-Pesa’s popularity has exploded in Kenya, with a customer base of close to 15 million subscribers, up from 2 million over five years.
Like EcoNet, M-Pesa’s parent company, Safaricom, dominates the telecommunications market in Kenya with a 67 percent market share, according to The Zimbabwe Independent. Like EcoCash, M-Pesa grew rapidly in its first year, although EcoCash’s first-year growth outpaced that of M-Pesa. And while Microfinance Africa reports that other countries have had difficulty replicating the long-term success of M-Pesa, similar marketing and business strategies and market domination make EcoCash a potential candidate to exhibit similar growth.
Most current EcoCash transactions are small, but the service is looking to increase its reach “into business services, such as bulk payments, salaries, and merchant transactions,” according to Mobile Money for the Unbanked (MMU). Customers currently pay a fee between 2 percent and 7 percent for transfers, but EcoNet hopes that as business volume continues to increase, those fees will be lowered further.
EcoNet sees the mobile money service “as a strategic business, rather than simply another product in its portfolio,” Francis Matseketsa, the head of EcoCash, told MMU:
"EcoCash believes that its primary economic driver will be cost savings on airtime distribution, as transaction revenue alone has not yet pushed the service to break even ... [and] offers a 5 percent discount on airtime purchased with EcoCash, a promotion that has proved very popular with customers."
Yet whether or not EcoCash proves to successfully bring Zimbabwe towards a thriving cashless economy, it has already demonstrated its ability to create jobs and keep cash changing hands – or phones – in what was long known as one of the world’s worst economic climates.
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