Zimbabwe: Mobile Companies Spur Financial Transactions Growth
The entrance of mobile phone companies in the financial services sector has accelerated the growth in the value of mobile and internet-based transactions to 6.6 percent in July 2014.The entrance of mobile phone companies in the financial services sector has accelerated the growth in the value of mobile and internet-based transactions to 6.6 percent in July 2014.
These figures were part of the Reserve Bank of Zimbabwe's July economic review. In value, mobile and internet-based transactions moved from $388.46 million (€300.8 million)
in June to $414.09 million in July.
Card-based transactions also accelerated by a strong 8.74 per cent, to $392.81 million in July from $361.25 million in June. This growth was also eased by the entrance of mobile phone operators to the sector of plastic payment, with Econet launching the Ecocash card while Telecel launched Telecash. Transactions through the RTGS system increased by seven per cent in value and three per cent in volume over the period.
The same report also showed domestic credit grew 6.02 per cent, on the back of a strong growth of credit to the government sector, driven by the conversion of foreign currency accounts balances into Treasury Bills. “Net credit to government grew to $429.98 million in July 2014 from $215.53 million in July 2013", which represented an 81.54 per cent growth, the central bank noted. In its monetary policy statement, it explains that this issuance of Treasury Bills ($406 million since the beginning of the year) is mostly linked to the takeover of the bank's debt by the government.
The weak growth of credit to the private sector of 0.87 per cent reflected the increased risk aversion of financial institutions attempting to mitigate the impact of an increase in non-performing loans. The overall ratio of non-performing loans to total credit in the banking sector increased to 18.49 percent in June 2014, from 14.51 percent in June 2013.