Tech-giant, Cassava Smartech Zimbabwe Limited’s revenue diversification strategy boosted earnings in the first half (H1 FY2021) of the 2021 financial year ended August 31 after the Group’s largest subsidiary-Ecocash transaction volumes plunged.
Ecocash, which is also the country’s most subscribed mobile money operator, was largely abused by illegal money traders prompting the Reserve Bank of Zimbabwe to rein on its operations during the period.
In April daily, monthly and transactional limits were reduced before the suspension of Agents with transactions above ZW$100,000 in May.
In June, Agent to Agent transactions were suspended and a directive to integrate Ecocash to Zimswitch, in line with SI 80 was put into effect.
In August there was a revision of mobile money limits and permissible transactions before a ban on the use of multiple wallets by individuals was announced in September.
As a result, “due to the nature of transactions processed on the Ecocash platform, which are high volume and low value, the value of transactions processed on the platform has gone to about 19% of the total value processed on the National Payments System down from 30% in the prior year,” the Group said.
However, consolidated revenues for the period increased by 443 percent in nominal terms, from the same period last year largely driven by an increase in transactional values due to hyperinflation.
Transaction activity was subdued when the COVID containment measures were implemented nationally in March this year.
Growth in the Insurtech and Vaya Technologies business units as well as Steward Bank’s stable contribution to the Group revenue also reduced Ecocash revenue contribution.
However, the mobile money operator remained the largest revenue contributor to the Group’s earnings with a 62 percent contribution to total revenue during the period under review, down from 72percent comparable period prior year.
The Banking sector contributed 20 percent, followed by Insurtech with 13 percent and other subsidiaries contributing 5 percent.
“The Insurtech business has recorded significant growth during the period, stirred mainly by the growth in Moovah revenues. Growth prospects for this business unit are high, as we continue to introduce new products under the short term insurance line,” the company said.
