EcoCash pushes Steward Bank deposits by $20m

Published: 10 April 2014

ECONET Wireless Zimbabwe's electronic banking product, EcoCash Save, has bolstered the deposit base of its commercial banking sibling, Steward Bank, a senior executive said.

Steward Bank chief executive officer (CEO), Kwanele Ngwenya, said at least $20 million in fresh deposits has been channeled into the bank through the EcoCash Save platform, which has significantly pushed the number of its account holders.

Econet announced that EcoCash Save customers would now be able to access loans through the platform without having to provide security. The new product EcoCash Loan, offers micro loans of up to $500 through its mobile money platform. The loans will be underwritten by Steward Bank, a commercial bank wholly-owned by the mobile phone operator, and have a maximum tenure of 30 days, with an interest rate of five percent.

"Steward Bank has raised $20 million through its EcoCash Save platform with the bank's account holders now at 853 000 in three months which is a record achievement by a single bank," Ngwenya said after launching Ecocash Loan.

Ngwenya said the platform would significantly reduce the number of the unbanked people as it covers the whole country. This would help effort towards rebuilding the economy, said the Steward Bank boss.

"Society needs to be educated on saving because building an economy requires starting from the bottom pyramid," he said.

Ngwenya said Econet Services had enabled the bank to grow and partnering them was the "right thing to do".

"It is not hard to do the right thing, what is hard is to know what the right thing is and once you know what the right thing is, it is hard not to do it," said Ngwenya.

Launching the EcoCash Loans product, EcoCash CEO, Cuthbert Tembedza said the product was part of the group's innovation which was expected to help improve financial inclusion.

"If you look at your EcoCash menu there is now a new addition where you can select the amount you want and it will be transferred into your account instantly. We are starting with 30 days to repay but we will go beyond to two months," he said.

In terms of eligibility to access the loans, Tembedza said it requires one to be active on the EcoCash Save platform for three consecutive months and is available to persons above the age of 18 years. But how does Econet determine how much money one can be advanced? He said a credit rating system which measures how active one has been on their wallet and how much they spend monthly on airtime and data will be used.

"We look at the amount of airtime you spend and data, it is the information readily available to us, it tells us the trend and spending pattern and risk we are prepared to take on you. This is a contractual product so you have to be above 18 years to have access," he said.

He said if one selects an amount that is not in line with their spending pattern, the system will advise them that "they cannot access this much but qualify for this amount".

Tembedza said the EcoCash Loans product was the third pillar on financial inclusion after having launched the EcoCash Transfer and EcoCash Save platforms and an insurance cover for farmers. In January, Econet launched the Eco schools programme, the Eco Zero internet in February, and now the EcoCash Loans.
- fingaz