ECONET Wireless prepaid service subscribers are now able to access a maximum of $500 worth of loans using cell phones under Econet’s mobile phone savings account. The mobile phone-based loan facility is being rolled out by Econet’s subsidiary Econet Service under its mobile money transfer service EcoCash to prepaid service customers.
According to Econet Service, to be eligible the clients must be holders of EcoCash’s mobile phone account EcoCashSave and be active for at least three consecutive months.
This comes after about $20 million was raised from the mobile phone savings account three months after its inception with the number of accounts closing in on the one million mark.
In line with regulatory requirements, the EcoCashSave loans will be extended in partnership with a financial institution, Steward Bank, which is also a subsidiary of Econet.
EcoCash chief executive Mr Cuthbert Tembedza said immediately, Econet’s prepaid customers can now access up to $500 loans through their phones without the need for security.
“There is no application form required, you can access a loan from a minimum of $5 to as high as $500,” said Mr Tembedza.
He said this will further enhance financial inclusion.
“It is only right to do so because for some people, the difference between life and death is only $10,” he said.
Clients can access loans for a period of 30 days, but Mr Tembedza said plans were underway to extend the loan tenure in due course.
The EcoCash CEO said borrowers will be charged 5 percent handling fee and no other charge will be applicable.
Steward Bank managing Director Mr Kwanele Ngwenya said there was need to encourage the culture of saving as this was what helped build the economy right from the bottom.
“We have $20 million sitting in that account.
“We are saying your money is our commitment and with (almost) one million accounts you can come and borrow as well,” Mr Ngwenya said.
Mr Ngwenya said the loan facility will bring huge convenience and relief to customers in need of emergency funds.
In order to access the loans applicants must be EcoCash customers who saved a minimum of $5 in the last three months, have at least $5 balance in an EcoCashSave account, be active on the EcoCash platform, have an active Econet Wireless Zimbabwe sim card and be above 18 years. Further, customers expenditure on Econet service such as airtime and data service as well as transaction frequency on EcoCash will determine the loan threshold they qualify for.
Mr Tembedza said the launch of the EcoCashSave account marks the third pillar of financial inclusion, credit with the earlier one, Econet Service introduced being mobile money transfer, savings and insurance cover for farmers.