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Senior Business Reporter
ECONET Wireless Zimbabwe says its mobile money transfer service, EcoCash which presently processes more than $350 million per month, will drive the growth of Steward Bank.The bank, wholly-owned subsidiary of Econet, posted a loss of $26,3 million for the 12 months to February this year as the company continues restructuring away from traditional banking to focus on services related to mobile banking.
Econet chief executive Douglas Mboweni said he was confident that Steward Bank, which played a critical role in the development and management of EcoCash, would soon turn to profitability underpinned by the mobile money transfer service.
“In terms of our strategy, the revenue model of Steward Bank was always going to be pinned on EcoCashSave and EcoCashLoan,” he said in a statement yesterday.
“We first of all had to get the money transfer services up and running before launching these other services. We have now launched these services in the last few months. By this time next year, you will see a very different Steward Bank.”
He said more than 1,5 million customers have opened bank accounts with Steward Bank using EcoCashSave.
Some of the account holders, he said, were Zimbabweans in the Diaspora who saw it as a convenient way to support their families at home.
Mboweni said the business strategy of their bank was unique and relied on innovation and technology and therefore did not require the level of staff that is ordinarily required by a traditional banking institution.
“It was not an easy decision, and we really agonised over this issue, but we realised that the bank would not be able to grow unless we restructured it to operate an innovation-led model,” he said.
“If the economy had been performing better, we may have been able to sustain some of these marginal branches, but it has not happened.
“It is something we regret and we will try our best to create new jobs in other areas as we have always done.”
Mboweni said Steward Bank was in the top five most capitalised financial institutions in the country and would receive more capital as required from Econet to allow the bank to develop more mass-market banking products.
The Econet boss on Monday told an analysts briefing that broadband and new services such as EcoCash were growing very rapidly.
During the year under review broadband grew by 62 percent and EcoCash by 307 percent, contributing more than 14 percent to the overall revenue.
Econet, which also owns Mutare Bottling Company and Steward Bank, realised profit after tax of $119,4 million.
It declared a dividend of 1,29 cents per share to its 9,000 plus shareholders for the first time in more than three years.
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