Econet Wireless is now allowing group savings on its mobile money platform, EcoCash, a development the company says will reduce risks associated with cash handling.
The EcoCash Savings Club will earn interest on “all pooled funds” each month.
Saving groups can appoint a chairperson who will undertake the opening of the account while approving members will also be selected from the group.
Savings groups are common in most African communities whereby members in a group put money together for a common interest such as buying properties or for funding functions such as funerals or weddings. Most of these groups appoint a member or take turns to keep the money inside their houses.
“They (saving groups) typically consist of a group of members who each contribute regularly into a cash pool that members borrow from on a rotating basis. While the practice is widespread, savings clubs face security risks in handling cash and difficulties in tracking contributions and withdrawals from members,” said an official at Econet Wireless.
The company said anyone registered on EcoCash can participate and set up the savings club, which is then opened using the appointed chairperson’s mobile phone account. Multiple SIM sign-offs are then used to approve withdrawals while all members can access the account to check on its balance and other transaction information.
Econet said the service was also aimed at the self-employed, informal sector entrepreneurs, street vendors and social investor women’s groups.
The company’s chief executive officer, Douglas Mboweni, said EcoCash was seeking to “create economies of scale that build up savings deposits for the nation” as well as demonstrate customers’ “credit worthiness” through their “savings patterns” using the mobile money platform.
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