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EcoCash and Econet, being two companies under the same control have announced their intention to move non-banking assets from EcoCash to Econet and the businesses made it clear that they will remain listed.
They also offer a rationale that finds context in Econet’s transaction that is unbundled EcoCash in 2018.
By the time EcoCash was listed as a stand-alone entity with the potential to grow into Zimbabwe’s first listed FinTech business. The structural and fundamental changes such as the ban on merchant lines, stringent regulation, dollarization, and stiff competition in mobile USD transactions amid a crunch in ZWL have wilted the transactions.
This is not the first time that transactions have been reversed in Zimbabwe.
The performance of the non-banking reveals losses from FY23 to date. Both the Mobile Money and the InsurTech segments recorded inflation-adjusted losses in FY23 and 1H24.
The banking segment was profitable in both periods. This non-banking will have the effect the lowering earnings in Econet.
The combined losses of the nonbanking assets in the 1H24 account for 32% of Econet’s net earnings over the same period. EcoCash bottom line will exchange losses equivalent to 77% of the revenue compared to Econet’s exchange loss of 34% of revenue and these exchange losses are not split by segment.
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