The Central bank on Monday clamped down on mobile money, banning the purchase and sale of cash through the services, in the latest directive aimed at gaining control of a monetary system that’s spiraling out of control.
Cassava Smartech the parent company of Ecocash has filed an urgent application for a temporary interdict regarding Reserve Bank of Zimbabwe’s (RBZ) directive for mobile payment system providers to discontinue cash in and cash out services. The central bank also stopped all cash-back facilities.
In his founding affidavit, Smartech chief executive Edmore Chibi represented by Mtetwa and Nyambirai, said EcoCash is a pioneering mobile financial service solution that has given access to the unbanked market in an unprecedented scale in Zimbabwe. Due to the serial collapse of banking institution in Zimbabwe, according to media reports, the size of the banked population had reduced to less than 10% of the population when EcoCash was introduced in September 2011.
In the application, the telecoms company says it is still in the process of complying with the central bank directive but is considering completely shutting down Ecocash.
The fate of millions of Ecocash subscribers whose tens of billions sit on the mobile money platform is at stake.
“The applicant for the management of mobile money transfer platform that has over 10.562.070 users of which 6.400.000 been active during that last 90 days.
“EcoCash has played a critical role in facilitation activity between Zimbabweans in circumstances of acute liquidity challenges. The cash in and cash out facilities are core to the EcoCash system. In order to pull these facilities down, Chibi said the whole EcoCash platform has had to be pulled down first.
“Pulling down EcoCash could thus mean loss of life, loss of opportunities that could save livelihoods and financial loss running into hundreds of millions if not billions,” reads the affidavit.
According to sources, the majority of senior executives at the RBZ were against the directive issued on Monday, as it is contrary to the spirit and vision of financial inclusion and moving towards a cashless economy.
“The idea was reached prematurely by some senior executives without much consultation. It was based on emotions and mounting pressure from the general public and certain senior political figures.”