eBusiness Weekly
Enacy Mapakame
Artificial intelligence (AI) is changing the nature of the financial landscape in economies in parts of the world. However, the significance of AI in emerging African economies like Zimbabwe has somewhat been less understood. Now Cassava Smartech Zimbabwe is looking to AI as one of its key future growth areas.
Undoubtedly, this is the direction that the entire world is moving towards (minus the obvious job threats resulting in rapid AI development). And several factors support this thrust. The demand for financial technology (fintech) is highest in countries where access to traditional banking services is limited.
For example, Cassava’s mobile money payments platform Ecocash has evolved into the most dominant such service in Zimbabwe, accounting for upto 95 percent of all mobile-based settlements in the country. One of the key factors helping Ecocash grow at break-neck pace are issues of financial exclusion and cash shortages.
Management are upbeat digital banking should continue to grow on robust Ecocash growth and increasing adoption of its digital platforms.
This comes as Zimbabwe’s economic environment continues to be an opportunity for digital bank to show the strength of its transactional banking model.
“The business is on a drive to scale-up and leverage on artificial intelligence and machine learning, big data, block-chain, chatbots and social media banking and payments to reduce operational costs and improve customer experience,” said Cassava chairperson Tracy Mpofu in a statement accompanying the group’s inaugural financial results since the firm listed on the Zimbabwe Stock Exchange.
“Customer convenience is the backbone of our success. Reflecting on this, research and development is a key component of our strategy, as we continuously innovate around providing total solutions to our customers.
“We believe there are opportunities for growth, in spite of the current macro-economic challenges and will, therefore, continue to make a concerted effort to turn these challenges into success stories,” Mpofu said.
According to management, Cassava’s integrated payments platform is revolutionary, pioneering in the sector, further entrenching its market position as the innovation leader.
Cassava was listed on the ZSE on 18 December 2018, becoming the first standalone listed fintech company in Africa as well as the most valuable listing by introduction on the local bourse.
This came following the approval by Econet shareholders last November for the smartech business to be demerged, giving birth to Cassava.
Its profit for the four months to February 28, 2019 came in at $9,3 million. Year on year, profit jumped 48 percent to $104 million while revenue doubled to $501 million in the year to February 28, 2019, which incorporate the eight months pre-demerger financial performance consolidated in the financial statements of Econet Wireless Zimbabwe Limited and the four months post-demerger audited financial performance under the new Cassava Smartech Zimbabwe Limited Group.
Profit from operations for the year jumped 57 percent to $170 million while profit before tax rose 29 percent to $137 million from $106 million. According to Cassava, comparatives for the financial year ended February, 28 2018 are based on proforma historical financial statements from the audited financial statements of Econet.
In the four months to February 2019, revenue stood at $173 million. Profit from operations was $41 million while a profit before tax of $11,5 million was achieved.
Total assets for the group stood at $1,5 billion at close of the period.
Cassava group is the holdings company for mobile money platform, EcoCash, Steward Bank and Ecosure among other businesses.
For the period under review, 9,8 million individuals were using EcoCash mobile money platform to transact, representing almost 90 percent of Zimbabwe’s adult population, while Steward Bank holds 1,3 million bank accounts, representing 37 percent of country’s banked population.
EcoCash has processed more than $78,4 billion worth of transactions since its introduction.
Mobile internet and money are expected to continue accounting for significant market share in the country, which will pay dividend for Cassava as the market turns to mobile payments due to cash shortages.
The expansion of EcoSure to include auto insurance, education and health insurance is also expected to drive growth. The company sees the low insurance penetration, currently at below 15 percent as an area of opportunity.
Specific tailored products for specific market segments will help deliver value as well as unlock Cassava’s full potential with most promising market being in agriculture- new farmers, youths and entrepreneurs.
