Zimbabwe can do well with plastic money over bond notes
BARCLAYS Bank of Zimbabwe has said the increase of plastic money usage by over 400 percent over the past month is a reflection that the country can do well with that plastic money instead of bond notes.
In his presentation at the Barclays/5talents workshop for young journalists, Barclays Bank managing director George Guvamatanga said six to seven million of transactions that used to happen in cash are now being conducted through the POS platform .
“The usage of plastic money has grown and we have over six to seven percent that used to happen in cash now happening in plastic money.
“Considering that plastic money usage has grown over four times and is continuing to grow and the amount of bond notes to be introduced and also considering people don’t like them, given these sentiments, if you were to ask me, I would take a percentage of the US$200 million and make it easier for people to transact in plastic money”.
“Don’t misquote me on my position I’m not saying I’m against bond notes or I’m for them. I’m simply giving facts.” he said.
Guvamatanga said the POS machines should be made much more accessible, cheaper and easy for people to transact.
Guvamatanga however said the bonds notes are simply a monetization form of the RTGs platform.“So if you were happy with RTGs the then you will be happy with bond notes. If you are unhappy with
RTGs you should be unhappy with bond notes as they are another form of making RTGs portable. They allow you to transact up to 10000 locally without limitation,” he said.
The announcement of the introduction of bond notes has caused panic amongst Zimbabweans as it has revived memories of the years 2007 and 2008 which were marked by severe food shortages and hyperinflation. It is not only the ordinary Zimbabweans that have not welcomed this development but corporates and economic analysts have also expressed skepticism on the issue.
Meanwhile, Guvamatanga said the other fact that was making Zimbabwe a harder economy to deal with is the fact that people simply can’t count and the country ends up having policies made on ill advices.
“I don’t have a problem with Statutory 64 but I have a problem with the process of the instrument. Someone went and got figures over supply and undersupply but what is the depth”.
“Maybe we shouldn’t be issuing those licenses at all. The policy is not well researched and no counting was done before coming up with the policy .If we can count then decision making becomes relevant,” he said.
Guvamatanga said policies become better after consultation and counting if the accurate numbers are not known, whatever is come up with is not well researched.
“If you can count then your decision making becomes relevant. We doing even know how much were receiving in the diaspora. We would be a much a better economy or country if we take time to count and understand of what we have and what we do not have but we just don’t count.
The government recently unveiled statutory instrument 64 in a move meant to narrow the country’s trade deficit and help ease cash shortages.
The new import regulation triggered protests in Beitbridge recently by South African businesses as they have lost millions as a result of the new regulations. Zimbabweans across the country have also expressed their displeasure as the majority of them are making a living through cross border trading.
On another note Barclays banks says it has availed Over US$75 million to over 4000 tobacco farmers under its SME support program.
Barclays commercial director Lawrence Nyazema said they were stepping up their efforts in support of SME’s and is currently targeting US$20 million in terms of loans to SME’S.
“It’s a loan that we have been doing for the past three years and we renew it every year .You can look at it and say your SME’s book is not much but if we don’t provide it these 4000 could have been stuck. The merchant we use has over 100 people under them who make it happen and we appreciate that we don’t have that capacity to do it on our own.
“We also have a fund that we want to push as much as US$20 million and some small loans are starting to come on our book which have a total of have 5 000 SMEs although not all of them want to borrow,” he said.
Nyazema also said Barclays was engaging reaching out to all audit firms to SME’s get audit at cheaper rates. –FinX
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