Zimbabwe’s central bank on Monday banned mobile money agencies from facilitating cash withdrawals or deposits. Following the ban, Zimbabwe’s richest person Strive Masiyiwa has resorted to courts to challenge the government’s move to ban mobile money services.
The embargo by Central bank to ban mobile money services has been widely criticised with online users saying it will not offer a solution to the current cash crunch facing the country.
The move to halt the cash-in and cash-out transactions has also come as a major blow to the thriving mobile money sector which accounts for 95 percent of all monetary transactions in Zimbabwe.
The Central Bank directive will have huge impacts on EcoCash users who form the bulk of monetary transactions in Zimbabwe.
Notably, physical Zimdollar notes have become scarce since it was made Zimbabwe’s sole legal tender in June.
Cross-Border Money Transfer In Africa: Is Bitcoin The Golden Silver Bullet?
The scarcity of physical banknotes can be pinned on the current currency crisis in the Emerson Mnangagwa-led country. As of now, very few banks provide depositors with physical cash. and mobile money has remained essential for most daily transactions.
To access cash which is limited, Zimbabweans have been resorting to mobile money agencies who were illegally selling cash at a premium which reached 60 percent recently.
The ban will also inconvenience most Zimbabweans since they do not have access to bank notes and are forced to rely on mobile money services for daily transactions.
In a letter, Zimbabwe’s central bank said the crackdown was necessary due to high commission rates being charged by agents. “Some economic agents are engaging in illegal activities, abusing the cash-in, cash-out and cash-back facilities thereby compromising the public interest objectives of national payment systems in the economy.”
Featured Image Courtesy: Twitter
