Clients of South Africa based money transfer service Kawena Distributors are reportedly livid with the company after being notified that 70% of money sent through to recipients in Zimbabwe will have to be used to make purchases from its retail partner, OK Zimbabwe.

It is understood that this was never part of the terms and conditions for those who signed up with the service.

To send money, the client must register, and then issued with an OK Shop Easy card. Zimbabweans in South Africa then make payment to their beneficiary's OK/Kawena Shop Easy Card.

Payment is electronically credited into the recipient's card and can be used to make purchases at any OK, Bon Marche or OK Supermarkets in Zimbabwe.

"As from 21 November all clients will have to spend 70 % on grocery and 30% on cash when sending money to Zimbabwe," claimed a notice at one of Kawena offices.

Network collapse

User anger intensified last week when Kawena's network collapsed and over 10 000 clients were requested to deposit their money into the Kawena account in South Africa.

Frustrated clients are not able to send money or withdraw monies already sent through.

There has also been speculation over whether the company was in fact still in operation, with one of its clients, believed to be a competitor, engaging Facebook to communicate this message.

Kawena Distributors has denied the allegations saying it could not be further from the truth and "nothing more than malicious lies from a desperate company which cannot gain any traction in this market."

"Kawena Distributors has been in operation for over 26 years and many more to come, our partnership with OK Zimbabwe continues to operate," the money transfer company stated.

The company did not mention the name of the competitor and threatened to take legal action should "slanderous attacks" against it continue.

Meanwhile, Kawena Distributors have told clients," Please be aware that all withdrawal limits in Zimbabwe are managed and controlled by the management of OK Zimbabwe."

According to figures from the Zimbabwe Ministry of Industry and Commerce, in 2014 about 1.9 million Zimbabweans in South Africa remit about R6.7m back to Zimbabwe each year. Approximately 20% of this money is used as remittance fees and an estimated 60% of people in Zimbabwe depend on remittances.