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the country’s productive and export sectors all but collapsed, there just wasn’t enough of the
foreign currencies in circulation.

“If you wanted to buy a packet of sweets for your child, you couldn’t get change,” said
Masiyiwa. Econet intervened with a mobile payments system which has set Zimbabwe on
course to become Africa’s first cashless economy. “Today 43 percent of the GDP moves
through Econet Wireless,” said the telecoms mogul. Explained Econet’s chief executive,
Douglas Mboweni , recently said: “We do not expect anyone to still be using paper money in
a year’s time. It will be just like Europe or America, where you no longer see people carrying
bundles of cash.”

Masiyiwa told the Guardian that his next challenge is to create a product that allows people
who are informally employed, such as smallholder farmers and casual workers, to access
credit. “In Africa 70 percent of people are informally employed,” he says. “The big frontier for
us is to create platforms where those people can access credit.” There is little risk that they
will get into unmanageable debt because the banks won’t extend excessive credit, calling
the system “self-regulating”.

“We’re trying to build up a savings culture where people are encouraged to save, even if
they only have a dollar – for children’s school fees, for transport, for the doctor. A savings
and credit infrastructure builds resilience.” However, in order to reach the unbanked,
financial institutions – and telecommunications companies – must design services that are
practical, simple and affordable. “I’ve got a customer who has a dollar in his pocket and has
got to decide to have some lunch, call his cousin or go to the doctor,” he said.

“We have to develop services with sensitivity to the fact that in Africa our customers don’t
have the same disposable income as in New Zealand, for example.” It would however, be a
mistake to assume the poorest behave differently to other customers. “Their behaviour and
aspirations are no different from those who have higher incomes,” cautioned Masiyiwa.
“They want to use Facebook. They want to use WhatsApp. We have to find ways for them to
access those things with their very low income.”

The UK Guardian 19-08-2014

- Will Zimbabwe be Africa’s first cashless society? Telecommunications company, and now
mobile banking service, Econet Wireless predicts that in less than 12 months notes and
coins will be long-gone from this southern African country. “We do not expect anyone to still
be using paper money in a year’s time,” the company’s CEO Douglas Mboweni recently
said. “It will be just like Europe or America, where you no longer see people carrying bundles
of cash.” The collapse of Zimbabwe’s economy in 2002 paved the way for Econet Wireless’s
mobile payment system. “Hyperinflation had destroyed people’s confidence in financial
institutions,” said the Zimbabwe company’s founder, Strive Masiyiwa, at the Mastercard
Foundation Symposium on Financial Inclusion in July.

“The lowest denomination circulating was $1,” Masiyiwa said. “If you want to buy a packet of
sweets for your child, you can’t get change.” The company set up a mobile payment system
that handles small amounts and allows people to save as little as $1. “Today 43% of the
GDP moves through Econet Wireless,” he concludes. Masiyiwa was born in Zweababwe
(then Rhodesia) in 1961. He and his parents fled the country in the turmoil after prime
minister Ian Smith declared independence in 1965, settling in Zambia. His parents, who ran
their own business, could afford to send Masiyiwa to school in Scotland when he was 12.
After school he studied electronic engineering at the University of Wales and worked briefly
for a computer company in Cambridge before returning to Zimbabwe in the early 1980s.

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