EcoCash targets US$1 billion mark next year

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ECONET Wireless Zimbabwe says transactions on its mobile money transfer facility, EcoCash, are expected to grow more than three-fold and top US$1 billion by August 2013 compared to US$300 million registered in its first year of operation.

Report by Taurai Mangudhla

EcoCash was launched in August 2011 and has grown to register more than 1,7 million users.

Econet CEO Douglas Mboweni told businessdigest on the sidelines of the company’s interim financial results to August 2012, EcoCash is on track to beat the US$1 billion mark in the coming year.

“If you look on an annual basis, there is no reason why we should expect anything less than a billion (US dollars) if we had US$300 million in the starting year, what is a billion?” Mboweni said, adding the product is growing phenomenally.

At US$300 million, the facility averaged US$25 million per month.
Mboweni said EcoCash was as of October handling US$70 million per month, US$14 million short of the US$84 million monthly average which the company needs to handle to reach the US$1 billion target.

He said EcoCash expects to exceed US$100 million at the end of November as the product taps into Zimbabwe’s unbanked society.

As of June this year, Reserve Bank of Zimbabwe governor Gideon Gono said money circulating outside the formal banking system was half of the US$4 billion which was sitting with the local banks.

EcoCash’s growth will see the country’s largest mobile network operator raking in US$20 million in revenue on the basis of an average 2% charge per transaction.

The projected revenue growth comes as Mboweni said EcoCash could be weaned off to become a standalone business unit depending on volumes.
While the Econet boss would not be drawn to specify the point at which volumes would warrant the proposed strategic move, he said management could also pursue other options.

To support growth of the money transfer business, Econet  acquired a majority stake in TN Bank and is now using the bank solely to support the activities of EcoCash.

Mboweni said the company would start working with more banks to grow the EcoCash business.

Econet recently announced major retailers across the country are setting up their systems to ensure people can pay through EcoCash.
Last month, the mobile operator launched its EcoCash commuter which has seen accredited commuter omnibus operators being able to accept fares direct from passengers during trips.

Econet services CEO Darlington Mandivenga said the move would put an end to change problems in the public transport business, particularly short distance trips.

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