The first small to medium enterprises (SMEs) foreign exchange auction has concluded. This second auction is meant to be inclusive of smaller businesses.

The big auction that is held every Tuesday has a minimum entry of bid US$50 000.00. So as you can imagine there would be a lot of businesses that wouldn’t be able to meet that first hurdle.

The minimum amount that any business or individual can bid on in the SME Auction is US$2 500.00. That figure (which is still pretty steep) lowers the bar significantly from the grand auction.

The results for the auction are as follows:

• Allotted amount US$460 167.99
• The Highest Rate ZWL$85.00
• The Lowest Rate ZWL$75.00
• The Lowest Accepted Rate ZWL$ 75.00
• Total Bids amounted to US$460 167.99
• Number of bids recieved 40
• Number of disqualified bids 7

I was expecting to see a weighted average for this auction but the RBZ said the weighted average for this auction remains on the same level as the Main Auction. They also said that the SMEs Auction will now run at the same time as the Main Auction.

Was this SME Auction a test run?

If this was already in the pipeline, then they might as well have included SMEs on Tuesday. Another question is now with both running concurrently will the weighted average be taken from the figures of both auctions? Or will the Main Auction dictate the rate?

I guess we will have to wait and see on Tuesday…

The post The first SMEs forex auction results are in appeared first on Techzim.

The first-ever combined forex auction (SMEs and Grand Auction) results are in. The Reserve bank last week decided to merge the two auctions after what seemed to have been a test run of the SMEs Auction.

The results are as follows:

Weighted Average Rate 82.5608

Grand Total USD18 771 040.43

The post First-ever combined forex auction results are in, rate now at 82.56 appeared first on Techzim.

It seems as though the authorities have now taken aim at the number of Pyramid and Ponzi schemes in Zimbabwe. The Reserve Bank of Zimbabwe (RBZ) and the Zimbabwe Republic Police (ZRP) are now rooting out these operations.

We have reported on these organisations before and how they have spread in these very difficult times. They are praying upon people who are seeking a means to make an investment and make ends meet. They promise returns that they cannot deliver and when the system collapses they leave people in the lurch.

What grounds are the authorities using?

The RBZ and ZRP are going after these operations because they are offering financial services without the required licence. The law specifically referenced is the Banking Act Chapter 24:20, which says the following in section 5:

“Banking business and banking activities not to be conducted except by registered banking institutions
(1) No person, other than a registered banking institution, shall conduct banking business in Zimbabwe.
(2) No registered banking institution shall—
(a) conduct any class of banking business unless it is registered in that class; or
(b) subject to subsection (2) of section seven, engage in any banking activity that is not specified in its registration certificate.”

One such organisation, KWD Digital Marketing, was raided by the RBZ’s Financial Intelligence Unit. KWD was apparently promising people that they would double their investment if they deposited money with them.

The police apprehended 65 potential investors at a KWD meeting they were crowded at for not abiding by COVID-19 public health measures. Employees of KWD were questioned by the police. According to Assistant Commissioner Paul Nyathi, some of these organisations are saying to people that they are registered with the Reserve Bank of Zimbabwe.

The police have now widened the net in search of such organisations and say that they have information on others operating across the country.

These operations come in many different forms but the formula is the same. Last week the RBZ warned people about these organisations in a statement that read:

“These are fraudulent investment schemes under which existing investors are paid returns, not from genuine market investment of their funds, but from contributions made by new investors, until a point when the scheme can no longer attract new investors and collapses.”

The post RBZ & ZRP step in to stop the spread of Pyramid and Ponzi schemes appeared first on Techzim.

The second combined Forex results are in and the rate. from the weighted average, is ZWL$82.92.

The results are as follows:

Weighed Average Rate ZWL$82.9184

Grand Total Awarded US$14 197 189.20

The post Second combined Forex Auction results, rate at 82.92 appeared first on Techzim.

The Reserve Bank of Zimbabwe governor John Mangudya has said that remittances grew exponentially after COVID-19. It was largely expected that remittances would crash due to job-losses and the Coronavirus-induced economic recession.

Mangudya speaking during a ZIMRA press conference mentioned that contrary to that belief remittances actually grew. From January to July 2019 Zimbabwe received US$349.7 million. During the same period for 2020, that amount grew to US$466.2 million – 33% growth.

Mangudya said in July alone there was 79% growth as US$59 million was sent to Zimbabwe.

This is an interesting trend as the World Bank predicted that remittances would decline by as much as 20% globally. Whilst this might still happen – it seems Zimbabwe is not as widely affected at the moment.

Remittances are generally very important as they make up nearly 15% of our GDP – the most globally;

The post Mangudya – Contrary to expectation, remittances skyrocketed after COVID-19 appeared first on Techzim.

The Monetary Policy Statement (MPS) is out and as we expect, the RBZ has announced some surprise regulations. The war against mobile money is far from over it appears…

What’s the new rule?

Under the section titled “measures to address mobile banking deficiencies” is a set of new regulations. Mobile money operators “shall with immediate effect close all multiple wallets and allow just one wallet per individual.” Yes, you read that right! If you have multiple accounts on EcoCash, that won’t be the case for long.

A lot is unclear…

As is always the case with these “immediate-effect-regulations” that RBZ has been issuing throughout the year a lot isn’t clear;

• The MPS doesn’t explain how this will be done. Will people with multiple mobile wallets from one provider be the only ones affected? If someone has one Telecash, EcoCash and OneMoney wallet are they safe or they too will have those closed?
• The RBZ doesn’t explain what will happen to money in the accounts being closed;
• In the event that an individual has multiple wallets, it’s not clear how mobile money operators determine which account to close.

Why limit mobile money wallets?

Limiting individuals to a single account has been done to counter agents who were using multiple lines;

Following the suspension and freezing of agent and bulk-payer wallets on 27 June 2020, mobile money operators have allowed illegal foreign currency dealers to use multiple individual wallets as a means to bypass the transaction limits and continue with their illicit transactions.

The post RBZ announces mobile money rule: Individuals can’t have more than one wallet anymore appeared first on Techzim.

Earlier today, the RBZ published the Monetary Policy Statement and there are a number of pretty shocking declarations. One of which is that agents lines are officially a thing of the past.

The same document also outlines that mobile money wallets will now be limited to one per individual.

RIP agents (2011-2020)

Agents have been a huge part of Zimbos life for the last decade. The RBZ suggest that they are out of our lives for good;

Agent wallets are no longer serving any legitimate purpose and were now being used primarily for illegal foreign exchange transactions. Agents’ mobile money wallets are therefore abolished, with immediate effect.

Monetary Policy Statement 2020

The central bank claims agents with funds in suspended/frozen accounts will be allowed to move the money to their bank accounts. But even that comes with a big asterisk since the funds will be moved on one condition. The Financial Intelligence Unit will first “determine the legitimacy of the source of funds.”

How many people will be affected?

In 2019, there were 59 219 agents. It is widely believed around 50 000 of those were EcoCash agents so that will be the most widely affected service provider. To be fair when you consider that agents had multiple agent lines the actual number of agents might be lower than 50 000.

Impact

It will be interesting to see the impact of this ban. In rural areas, agents had become the only source of cash since there are no banks and the RBZs overnight bans mean accessing cash in these areas will become harder.

In both rural and urban areas, agents were charging a premium for cashing-out (withdrawals). This will probably get worse since the agents (or people still assuming this role) now use normal lines that have a daily limits of ZW$5000.

On the flip side, this could mean people transition to digital money as cash becomes harder to obtain.

The post Agent lines banned by RBZ as “they no longer serve any legitimate purpose” appeared first on Techzim.

Zimbabwe’s Central Bank (aka RBZ) has been on a war path with mobile money services (mainly EcoCash) for most of the year. RBZ firmly believes EcoCash and other mobile money services have led to the currency instability in Zimbabwe.

After some court battles and tightening of mobile money regulations, mobile money in Zimbabwe looks much different than it did a year ago.

RBZ vs Mobile Money

In the Monetary Policy Statement (MPS), the RBZ has detailed some of the faults of mobile money services. There are new allegations included in the list of faults presented below:

• Non-adherence to KYC principles, characterised by creation of mobile money accounts using fictitious and unverified identification particulars;
• Creation of money on the platforms (overdrafts and fraudulent/fictitious credits) which is not backed by balances in the Mobile Money Trust Accounts;
• System infrastructure inadequacies and weak Anti Money Laundering controls;
• Failure to comply with, including willful disregard for, regulatory directives;
• Connivance between mobile money operator employees and customers to delay or illegally bypass account freeze orders;
• Failure to deduct or remit statutory taxes; and
• Rampant abuse of agent, super-agent and bulk payment wallets for purposes of trading on the foreign exchange parallel market.

As a result of all of the above the RBZ today announced two shock moves;

1. Agent lines banned permanently. RBZ says agent lines “no longer serve any purpose”;
2. Individuals no longer allowed to have more than one mobile money wallet. If you have more than one wallet – the other ones will be closed.

Before today’s declarations, RBZ placed limits on mobile money accounts and agent lines were suspended. Functionality of merchant lines was also restrained and the new rules increase pressure on mobile money services.

The post RBZ details faults of mobile money services which led to regulatory pressure appeared first on Techzim.

The Reserve Bank of Zimbabwe has urged local banks to update their cyber risk management policies in the face of COVID-19. Ok, that’s a bit misleading. RBZ says since digital transactions are increasing during the pandemic banks have to bolster their security.

Accelerated digitisation by banking institutions in the wake of COVID-19 and the remote working arrangements have expanded the attack surface of banks’ information technology networks. Critical business functions are more exposed to opportunistic and targeted cyber-attacks by criminals and thus increasing consumer protection risks.

Cyber and anti-fraud controls are critical for banking institutions during and post COVID-19. Banking institutions are called upon to remain alert to such threats and activate appropriate risk management responses and to conduct ongoing consumer education campaigns.

MPS 2020

RBZ has instructed banks to review their preparedness for cyber threats. Banks are then expected to submit updated Cyber risk policies before October ends.

Deja Vu

In 2019, Mangudya made a similar declaration. At the time he demanded banks update their cybersecurity policies and start issuing out EMV cards. The deadline for that was 31 March 2019. It came, went and banks didn’t comply. In fact, over 12 months later banks are still issuing out cards deemed insecure by RBZ.

After speaking to people in the banking sector it became clear why banks didn’t comply. Issuing out EMV cards was too expensive for the banks. If anything the economic downturn might mean banks are actually in a worse off position.

Alternatively, maybe banks can pass on the cost to clients. Bank clients are already disillusioned by bank charges when transacting…

The post Banks ordered to submit cybersecurity risk policies before October ends appeared first on Techzim.

Jointly held by the Reserve Bank of Zimbabwe (RBZ) & Udugu Institute the COVID-19 Fintech Hackathon aims to use Fintech to address the pandemic’s effects on healthcare, digital payments and economic recovery. 

The hackathon taking place from 28 to 29 August will be held virtually. It’s open to anyone with a programming or business background. Sign up as an individual or a team (3-5 people). Participants will have 24 hours of hacking to develop FinTech solutions addressing COVID-19 effects.

Challenge topics

Healthcare – Bolster and disrupt healthcare sector, minimizing the COVID-19 effects on the mediacl and health industry.

Digital Payments – Ideate and work on a digital payment solutions that are all-encompassing 

Economic Recovery – Collaborating and developing solutions that counteract the effects of COVID-19 on the Zimbabwean economy.

Prizes

Winning participants stand a chance to win up to USD $10k in prizes and will be fast-tracked to showcase their solutions at the Global Hackcelerator in Singapore later this year.

Participating candidates also stand a chance to get post-hackathon support from participating organisations such as Empretech, Udugu Institute, Eight2Five, IDBZ, ZIMNAT, BOOST Fellowship, British Council and ZimSelector.

You can apply for the Fintech COVID-19 Hackathon

The post RBZ & Udugu hosting COVID-19 Fintech Hackathon. Apply here appeared first on Techzim.

The third combined Main and SMEs Forex Auction have concluded. The local currency slumped marginally again this week from ZWL$82.9184 last week to ZWL$83.3994 this week to the United States Dollar.

The results are as follows:

Forex Auction Weighted Average Rate: ZWL$83.3994

Grand Total US$15 025 663.74

The post Foreign Exchange Auction results, rate now at 83.3994 appeared first on Techzim.

In abiding by the Reserve Bank of Zimbabwe’s directives, EcoCash has instituted a ZWL$5000.00 a day limit on transactions. The outline of how this will affect daily transactions is as follows:

“Transactions by all individuals shall be pegged at a maximum of ZWS5,000 (five thousand Zimbabwe dollars) per day with immediate effect. This threshold relates to all transactions by the individual. including;
a. Payments to merchants for goods and services and payments for utility bills
b. Send Money and purchase of airtime and data
c. EcoCash Debit Card
d. Wallet to bank transfers”

EcoCash

Looking at the above they have not only included how much money you can spend on goods and services but the amount of money that you can transfer within your own accounts (wallet to bank).

So what exactly can you do with the ZWL$5000.00?

I think we can all agree that in the event of an emergency, for example, someone needing medical attention or an unexpected expense, ZWL$5000 will surely not be enough. Consultation fees with practitioners, if one isn’t on medical aid or if the practitioner doesn’t accept the form of medical aid presented, will leave many who transact on mobile money with some issues. This also doesn’t include the money that will be needed for medication and any other things needed in the space of that day.

Basic goods and services

So how much can one buy with ZWL$5000.00 in groceries?

The figures we are going by are from ZimPriceCheck August 2020 grocery prices. The prices they listed were from selected stores and there are some outlets that they didn’t have prices for. These prices will vary from outlet to outlet, but it’s just to give us a rough idea of what ZWL5000.00 can buy.

Basic grocery needs:

Just a little over the ZWL$5000 EcoCash limit.

There were no prices for perishables (Meat, Fruit and Vegetables).

Utilities

Using Techzim’s ZESA Calculator ZWL$5000.00 will get you 1220.29kWh of electricity. A bit beyond what the average household will need, but there are those who may operate in light to medium industry, this may be a ballpark figure of the electricity they use.

The cost of fuel

If you are one of those fortunate enough to find a filling station that is selling fuel in RTGS, according to ZERA’s most recent price listing, the cost of petrol is ZWL$93.15 per litre and Diesel is $83.36 per litre. So for ZWL$5000.00 will get you 53.68 Litres of petrol and 59.98L of diesel.

Well, again that’s if you are lucky to come across a service station that is selling fuel in local currency.

Mobile data and home internet

For most mobile data (as well as airtime) packages, when the limit is looked at in isolation to them, aren’t really affected. The problem comes with some ZOL nad TelOne packages that exceed ZWL$5000.00, those look like they may have to be paid in part until the balance for the package is reached. This means that payments for these packages may have to be planned out well in advance. They will also have to planned around other payments.

Conclusion

This EcoCash ZWL$5000.00 limit restricts financial freedom on mobile money. The value of the ZWL$5000 in goods and services goes beyond the things listed above. Other things not covered are things like rent, school fees, medical insurance, vehicle registration, transport costs and many others.

The limit will change how people use mobile money. The alternative when faced with a large transaction or set of transactions will be to pay them off in parts. Another situation that could arise is being near or at the limit and then facing an expense like electricity. That means if there is no other alternative to mobile money then that payment will have to be made the next day.

This restriction could also see more people adopt (on top of conventional banking platforms) the use of cash, USD to specific. Some people could adopt the use of USD to avoid the limit as well as to sidestep the 2% Tax (which applies to bank card as well). This, however, is for those who have the USD, to begin with, and that doesn’t cover everyone.

It’s also worth mentioning that this limit also affects Telecash and OneMoney.

The post What can you buy with the ZWL$5000 EcoCash limit? appeared first on Techzim.

Many people were wondering if OneMoney and Telecash would all be subjected to the same regulations that were recently put into effect by EcoCash. Well, OneMoney is the second mobile money operator to effect the ZW$5000/daily transaction limit.

NetOne subscribers received the message below this morning;

Dear Customer. Following a RBZ directive, OneMoney transactions are now limited to $5000 per day with immediate effect. Inconveniences caused are regretted.

A lot of people assumed that the new regulation applied to EcoCash exclusively but that doesn’t make sense. The issue the RBZ is trying to solve is that of illegal foreign currency trade. If regulation only affected EcoCash, money changers would simply flock to the less regulated platform.

RBZs regulation plainly stated that ALL mobile money providers would have to adhere to the new regulatory position. Targeting EcoCash in isolation would also give EcoCash a foot to stand on in a court of law against the regulator.

It’s unclear at the moment, if Telecel has already effected a similar limit on their platform.

The post OneMoney follows EcoCash and effects ZW$5000 daily transaction limit appeared first on Techzim.

The combined SMEs and Main Foreign Exchange Auction has concluded. This week the local currency made a marginal gain with weighted average sitting at ZWL$83.3209. Last week weighted average and effectively the rate sat at ZWL$83.3994 which is a very small uptick of ZWL$0.0785.

This is the first time that there has been a bounceback of the local currency since the inception of the auction.

The full results are as follows:

Foreign Exchange Auction Weighted Average Rate: ZWL$83.3209

Grand Total US$16 016 059.10

The post Foreign Exchange Auction, Zim dollar makes a marginal gain, rate at 83.32 appeared first on Techzim.

Pensioners are a group that has been a little overlooked when it comes to how they received their US$ allowance. Civil Servants have been beneficiaries of convenient platforms as well as FCA Cards. In a report from Sunday Mail, RBZ Governor John Mangudya said that Pensioners will soon be getting FCA cards.

“It was brought to our attention and we recently met with the CEOs of various banks on the issue and they assured us that pensioners would receive their cards any time from now, as the cards are being imported”

Dr John Mangudya, Reserve Bank Govenor

The governor went on to say that they are putting pressure on the banking institutions to fast track the process. They hope that the situation is resolved in a couple of weeks.

“We also reiterated to the banks that the service will be free and the cost will be borne by the Government, so pensioners will get their money in full. All banks need to do is to send the invoice to us and we pay.”

Dr John Mangudya, Reserve Bank Govenor

There were reports that pensioners were facing a hard time while trying to access their COVID-19 allowance. The same report says that pensioners were reportedly allowed to liquidate on US$50 of the US$60 allowance over a two month period from July to August. This is what prompted the Reserve Bank to meet with financial institutions.

Hopefully the process to get Pensioners FCA cards doesn’t take any longer than the timeline given by the RBZ.

The post Pensioners to get FCA cards, govt says it will pay for them appeared first on Techzim.

In adherence to the Monetary Policy Statement put out by the Reserve Bank of Zimbabwe. Individuals are no longer allowed to have multiple EcoCash accounts.

In a message sent out to customers Ecocash said the following:

Public Announcement

If you have 2 or more EcoCash lines dial *150# option 5 to select your primary wallet on or before 6 September 2020.

EcoCash

This means that if you have more than one account you will have select the one you want to keep. It stands to reason that you will also have to transfer the funds to the EcoCash wallet you want to keep.

Today is the deadline so if you have multiple EcoCash accounts it’s best to move any funds in order to avoid any complications.

The post EcoCash sets deadline for multiple accounts for the 6th of September 2020 appeared first on Techzim.

The Zim dollar has for the second week in a row appreciated slightly. This week’s Forex Auction results show that the median average is ZWL$82.6993 against last week’s rate of ZWL$83.3209. Last week’s climb was by ZWL$0.0785, and this week there is a slightly more substantial climb of ZWL$0.6216 when compared to last week.

The full Forex Auction results are as follows:

Forex Auction Weighted Average Rate: ZWL$82.6993

Grand Total US$19 211 204.52

The post Forex Auction results, Zim dollar gains again, rate now at 82.699 appeared first on Techzim.

President Mnangagwa recently addressed a ZANU-PF Committee in Gweru and in that address he spoke on the long-running feud between EcoCash and the state.

The President had some interesting things to say about the mobile money operator which has been accused by the financial regulator and state officials of being behind runaway inflation.

We realised that Ecocash was behind all this so we studied this thing and got to their server and found everything, every corruption and takatora tsvimbo ndokurova, it was painful to others but we said we only allow limited mobile money and it must reflect in the account.

President ED said that there was $8.4 billion circulating outside of the banking system which they only discovered after investigating:

We were all confused as to what was happening until we set up a committee and we discovered there was up to $8,4 billion circulating outside the banking system, which money in financial terms, is phantom money, which is some sort of ghost money whose source no one knows.

Nothing new here

The President’s comments just recall what the regulator (RBZ) has said about EcoCash and mobile money operators before. RBZ claimed that mobile money operators were actually creating money which isn’t backed by balances in their trust accounts.

Because of the weak KYC of mobile money platforms, the regulator suggests that many account holders were using “ficticious and unverified” identification particulars. This in turn makes it extremely difficult to find out who is behind money laundering.

The result of this has been new regulation that has limited the use of mobile money. Revised monthly and daily limits were introduced and a limit has been placed on the number of mobile money accounts one can have.

The post President ED – State had to act against EcoCash because $8.4 billion was circulating outside the banking system appeared first on Techzim.

So yesterday, it was announced that the ZW$5000 daily limit for transacting has been lifted. In its place will be a ZW$35 000 weekly limit which you can exhaust in one day if you want.

Whilst this is an improvement on what was in place there are still too many potential problems that could arise from these new limits.

The first problem I see is that of reaching your limit whilst transacting in batches. One of the new restrictions set in place is that mobile money users are restricted to ZW$5,000 limits per transactions. This means that if you want to buy something for $22,000 you’ll have to transact 5 times! Yuhp 5 times.

So many things can go wrong. For example 4 transactions can go through and then a mobile money service goes down before the 5th. What happens then?

Another disastrous scenario I foresee involves consumers actually forgetting how close they are to their limits and because the transactions are in batches you might only realise that you have reached your weekly limit after having sent a 2 of the 3 neccesary amounts.

At the moment there is too much friction and the regulators and mobile money service providers will have to fix these aspects otherwise consumers will just use their banks which have a better experience

What can the regulator do?

Remove the ridiculous ZW$5,000 per transaction limit. It doesn’t serve a clear purpose and will only serve to make for more errors when consumers are purchasing things. If I want to use my ZW$35,000 in one go please allow me to do so without issue.

…and mobile money service providers?

At the moment there are two things, I can see mobile money consumers doing to make consumers lives easier. First mobile money services can give more clarity as to when a week actually begins and ends so that I know which part of the cycle I’m on at any given time (pun definitely not intended).

Mobile money providers can also provide notifications reminding consumers how close they are to exhausting the weekly limit so that none of us bite more than we can actually chew when transacting. This will make probably reduce transaction reversals and make the service a bit more palatable to use.

The post New ZW$35k limit for mobile money is a decent improvement – Here’s how RBZ and service providers can make it consumer-friendly appeared first on Techzim.

Back in April, the World Bank forecasted that remittances to Sub-Saharan Africa would take a 20% dip. The reasoning behind this was of course because of the impact that COVID-19 has had on the incomes of those who are working abroad. Job losses have been a feature of the pandemic and all of that was going to play a part in money inflows from the diaspora.

Well, it seems like that hasn’t been the case if we look at Zimbabwe in isolation. Remittance figures for the country have been growing steadily over the year. According to the RBZ’s latest figures, money from the diaspora has grown by 48% in the last 10 months:

From the above figures, there was a contraction in March and July which would have indicated that 20% decline the World Bank alluded to. However from then on the numbers have been very impressive, this year’s figures are on course to being the best since 2016:

The post Despite COVID-19, money sent to Zim from the diaspora is up by 48% appeared first on Techzim.