The significance of The Ecocash mobile money service in fostering financial inclusion in the Zimbabwean informal sector

Abstract

This research set out to assess the significance of the EcoCash mobile money service in fostering financial inclusion in the informal sector in Harare, Zimbabwe. Many individuals operating in the informal sector have been financially excluded because of a variety of factors. These range from lack of documentation to the cost of using formal financial services. The path to financial inclusion has been accompanied by initiatives designed to address all the systemic and institutional problems, at the same time advising individuals to overcome barriers at their personal level. Hence, the creation of mobile money services such as EcoCash Launched in 2011 by Econet, a telecommunications company, has given people in the Zimbabwean informal sector the chance to participate in Zimbabwe's mainstream financial economy. The main aim of financial inclusion is to cater for the poor and unbanked as this can be viewed as a catalyst to reduce poverty. A qualitative case study design was adopted for this research. The study site was Harare, Zimbabwe. The participants consisted of informal workers. The interviews schedule was the main data collection instrument, and this was supplemented with literature and document analysis. The study found that informal workers found EcoCash very important when it came to fostering financial inclusion. They identified EcoCash as a convenient service that assisted with carrying various financial transactions and this was more accepted because of how efficient and easy it was. Ease of use coupled with less bureaucracy when registering allowed for more informal workers to sign up for the service. The study also revealed that EcoCash is a digital wallet that allowed participants to store their money there and not keep physical cash at home which is not safe. However, one common thought that all participants addressed was that of transactional costs. Most informal workers are low-income earners, thus the cost of transacting for many of the participants has been expensive. This has presented some policy debates when it comes to regulating mobile money services due to their costly nature.