Analysts have said the government’s move to cap individual Ecocash transactions to $5000 per day will hit many businesses who were surviving through receiving money from the unbanked populace through Ecocash the hardest, The Zimbabwe Independent reports.
Zimbabwe National Chamber of Commerce’s president Tinashe Manzungu commenting on the issue said the restriction will affect those in marginalised communities without access to banking facilities:
Most people in Zimbabwe prefer to use mobile money, which is fast and convenient compared to the traditional banking system. This, combined with a lack of financial education, creates very high barriers to banking for the rural populations and for the farming communities outside towns. Mobile money has afforded the marginalised, the rural and the small-holder farming communities the chance to be integrated into the country’s formal financial system and be able to contribute to the country’s fiscus through various taxes and levies.
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Increased demand for Zimdollar cash notes will impact the already existing premium on cash notes, whilst near 100% dollarisation implies an accelerated depreciation of the Zimdollar as it becomes less and less preferable. It’s a move that will force retailers to charge for goods in foreign currency, which will be unfair to most people who are still getting paid in local currency.
Retailers’ Association of Zimbabwe president Themba Ndebele said the restriction will cause a disruption in the market:
There will be disruptions in the market since a lot of people were used to EcoCash and will be forced to migrate to the formal banking system.
While ZCTU’s Japhet Moyo called the government’s policies fire fighting:
The fire-fighting mechanism by the Reserve Bank, which is not even sustainable, will hit growth of the SMEs, the majority of whom cannot afford to use the formal banking system that is expensive for their payrolls and procurement of materials
Not long ago the central bank was bragging about the country swiftly becoming a cashless society, but now they are forcing people to revert to using cash. How does one limit the use of mobile money platforms without providing the alternatives?
Mobile money platforms came into effect because of cash shortages and now they are restricting them without providing the cash. The central bank should have consulted widely with various stakeholders to find ways of dealing with those who were abusing the facility instead of resorting to a wholesale blanket ban
Shepherd Kembo, a businessman said sales volumes were likely to decline due to the restrictions and said:
This is yet another knee jerk reaction and inconsistent policy directive from RBZ, that doesn’t help formal businesses let alone the SMEs sector. At the moment, businesses are already grappling with depressed demand made worse by the limited daily trading hours.
Instead of having to deal with such depressed business volumes, shops will now have to further deal with bottlenecks and constraints to do with ZW$5 000 a day payments system. With rising inflation, the ZW$5 000 limit is not enough to pay for essentials like internet, electricity let alone raw materials,
More: Zimbabwe Independent