EcoCash to invest in banking technologies

EcoCash Holdings Zimbabwe Limited (EcoCash) plans to invest in technologies to expand its banking unit, Steward Bank, after transferring its fintech firms to Econet Wireless Zimbabwe. This move was approved by shareholders at an extraordinary general meeting on April 17, resulting in EcoCash's market capitalization dropping from ZWG1.42 billion to ZWG718.07 million.

EcoCash chairperson, Sherree Shereni, stated that Steward Bank, now the main unit under EcoCash Holdings, will focus on digital banking expansion, investing in technological innovations to enhance operational efficiencies and increase customer product offerings. The fintech businesses transferred to Econet Wireless Zimbabwe, including EcoCash (Private) Limited, VAYA Technologies Zimbabwe (Private) Limited, and others, are expected to leverage Econet's customer base and technologies to scale up and improve efficiencies.

IH Securities noted that EcoCash settled its debentures during the review period, reducing the adverse impact of exchange losses on profitability. Going forward, Steward Bank aims to diversify and grow, focusing on the low-income mass market, which requires a liquid balance sheet due to high transaction needs. However, the bank's reliance on short-term deposits limits its ability to earn interest income, depending mainly on transactional income. The anticipated El Niño drought could reduce consumer liquidity, potentially impacting transaction volumes and the bank's earnings.

Before the reconstruction, EcoCash recorded a revenue of ZWL$874.7 billion, a 64% increase from the previous period, and a profit of ZWL$287.3 billion, a significant rise from a loss of ZWL$89 billion the prior year, mainly due to a net monetary gain of ZWL$1.67 trillion.