Government should allow greater use of mobile money platforms in the country as a way of bridging the financial divide, the Postal and Telecommunications Regulatory Authority of Zimbabweâ€™s (POTRAZ) Director General Dr Gift Machengete has said.
According to the Journal of Economic Surveys volume 34, mobile money platforms permit rapid, secure and lowâ€cost transmission of money over space and time.Â
Also, they always allow recording of transactions which, among other benefits, enables the creation of individual transaction histories and credit scores.
Further, there is increased transparency which helps bring users into the formal financial system. Many firms that use mobile money are more likely to obtain loans or lines of credit. Several countries allow tax payments to be made through mobile money.
Whilst presenting the second quarter industry report last week, Dr Machengete had this to say;
â€œMobile money services are expected to continue playing a key role of bridging the financial divide by providing convenient, safe, secure and cheap financial services in areas where many Zimbabweans have no access to formal banking systems”.
He also singled out the role played by mobile money in curbing the spread of the COVID-19, which as of 28 September 2020 had infected 7816 people and killed 228.
Dr Machengete said the COVID-19 pandemic exposed the critical importance of telecommunications infrastructure in keeping businesses, governments and societies connected and running.
Zimbabwe has four mobile money platforms, namely Ecocash, OneMoney, Telecash and MyCash.
Recently, their operations came under heavy scrutiny, with the Reserve Bank of Zimbabwe (RBZ), which has regulatory oversight into their services.Â
The RBZ introduced the Foreign Currency Auction system amid accusations that these service providers were responsible for fuelling the foreign currency black market exchange rate with the aide of agents. This led to destability in the market prices.
The Foreign Exchange Auction System sought to address the allocative inefficiencies which characterised both the interbank market and the fixed exchange rate policy. Its main objective was to ensure there is price stability and exchange rate price discovery. Quite evidently, prices have been stable for the past 9 weeks or so.