Zimbabwe Q&A: How remittances are supporting the growth of innovation in Zimbabwe

Wed Feb 15 09:24:52 CAT 2023

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Zimbabwe Q&A: How remittances are supporting the growth of innovation in
Zimbabwe

 <mailto:diasporamortgages at cbz.co.zw> 

One of the fastest-growing sectors in Zimbabwe is financial technology,
which has led to a rise in the applications and tools that improve
international remittances, a major source of incoming liquidity to the
country. With
<https://www.businessweekly.co.zw/diaspora-remittances-breach-us2bn/#:~:text
=Zimbabwe%20is%20estimated%20to%20receive,receiver%20in%20Sub%2DSaharan%20Af
rica.>  remittances from overseas surging from $1b USD in 2020 to $2b USD in
2022, further innovations can be expected to shrink costs, decrease risks,
and improve customers' experience.

Over the last decade, we have seen a dramatic rise in technologies and tools
supporting global money transfer services. Today, transfers that could
normally take up to several weeks through traditional institutions to
complete, can be done in just a few hours.

Many homegrown solutions are also expected as the government, development
partners and private sector companies work in unison with finance innovation
hubs to accelerate the growth of a knowledge-based and
<https://allafrica.com/stories/202202040156.html>  tech-led economy.

We interviewed Darryl Pietersen, Director of Anglophone Africa,
<https://www.worldremit.com/en/zimbabwe?amountfrom=100.00&se>  WorldRemit on
Zimbabwe's technology and remittance trends.

Q. What recent trends have you observed in Zimbabwe's remittances sector?

A. There has been a lot of recent transformation in the remittances
industry, from technological advancements to increased partnerships between
digital payment operators and financial institutions. However, due to
economic challenges in Zimbabwe, the fast-paced
<https://blog.mondato.com/mobile-money-in-zimbabwe-shaken-but-still-standing
/>  dollarization and preference for foreign notes by consumers, cash
remains the country's most significant remittance channel. 

While other African countries can possess more than double the number of
mobile money users than the number of bank accounts, in Zimbabwe, the number
of active mobile money users is just 4.3 million, according to the Reserve
Bank of Zimbabwe's 2022
<https://www.rbz.co.zw/documents/mps/2022/Monetary-Policy-Statement-August-2
022-.pdf> Monetary Policy Statement. And yet, despite this, mobile money
ascension continues. We have seen a level of choice where Zimbabweans use
mobile money, as it offers more efficient and speedy transfers.
Additionally, at
<https://www.worldremit.com/en/zimbabwe?amountfrom=100.00&selectfrom=gb&curr
encyfrom=gbp&selectto=zw&currencyto=usd&transfer=csh>  WorldRemit our
partnership with financial institutions remains critical to the success of
remittance pay-outs in Zimbabwe. Through these partnerships, we have
increased service coverage, allowing withdrawal services that involve
minimal travel and costs. 

Q. In terms of innovation, which sub-sectors of remittance technology do you
see as having the most growth in 2023?

A. Data is a very important tool in the growth of any business sector, but
its value is even greater in the financial world. We anticipate more growth
in the number and quality of financial and remittance data handling and
management tools. Security, too, is an extremely important consideration of
the remittance business. We anticipate more growth in technologies for
securing transfers from the point of dispatch, through the various switches
and interchanges, and on to the point of withdrawal.
<https://www.mckinsey.com/capabilities/risk-and-resilience/our-insights/mana
ging-financial-crime-risk-in-digital-payments>  Security innovations are
especially important as the money transfer world is increasingly targeted by
fraudsters.

In the next year and beyond, we expect to see more innovations around
protecting remittance integrity. Both recipients and senders are expected to
gain more capacity for managing their transfers through advancements in
real-time tracking technologies. The increasing internet penetration
(currently at 29%, supported by the easy accessibility of smartphones, is
expected to drive the
<https://data.worldbank.org/indicator/IT.NET.USER.ZS?locations=ZW>  uptake
of such capacities.

Q. Globally, remittances have contributed to the rise of new innovative
businesses. Which lines of business do you see as gaining complementary
growth in line with the transformation remittance sector?

A. The mobile-money sector is one of the biggest areas of transformation in
the remittance industry. At WorldRemit, we aim to create the most fluid and
secure path for the flow of remittances from anywhere in the world to
Zimbabwe.

We have invested heavily in technologies that improve our customer
experience through diversified tools and products for both senders and
recipients. Globally, we have created a number of special solutions for
instance by allowing  SMEs involved in international trade, make payments to
their employees and contractors across the globe, with the aim of saving
their  <https://itweb.africa/content/nWJad7bejolvbjO1> businesses time and
money when making international payments.

Our partnerships with financial institutions have allowed us to penetrate
the country in ways that were not possible before and going forward, we know
more growth will come from our vast pay-out networks such as our cash-pick
up, airtime top up and mobile money services. We are already seeing more
value

in investments that bring withdrawal services closer to the people, as more
and more Zimbabweans gain access to the international money transfer
options.

Q. A cost-of-living crisis is occurring globally, and Zimbabwe is among the
worst-affected countries. How do you envision this challenge will affect
remittances to the country?

A. It is true that as a world we are currently in troublesome times, which
may not
<https://guardian.ng/ama-press-releases/will-remittance-trends-from-2022-in-
zimbabwe-continue-in-2023/>  subside until later in 2023. However, as of 31
December 2022, Zepz users globally have sent over $500m USD to Zimbabwe this
year. We expect this trend to continue as Zimbabweans abroad remain astute
in supporting their families back home.

ENDS.

Invest Wisely!

Bulls n Bears 

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