Business Reporter
The entrance of mobile phone companies in the financial services sector has spurred on the growth in the value of mobile and internet based transactions to a 6,6 percent increase to $414,09 million in July 2014, figures from the Reserve Bank of Zimbabwe’s July economic review show.
Mobile and internet based transactions moved from $388,46 million in June 2014.
Zimbabweans have also adopted the use of plastic money with total value of card based transactions increasing by 8,74 percent to $392,81 million in July 2014, from $361,25 million in June 2014.
Mobile phone operators have also entered the plastic money business with Econet launching Ecocash card while Telecel launched Telecash.
Transactions processed through the RTGS system in July 2014 increased by 7 percent to $3.9 billion from $3.7 billion in June 2014.
“In volume terms, transactions registered an increase of 3 percent to 199 587 from 193 582 during the same period,” the central bank noted.
“On an annual basis, domestic credit grew by 6,02 percent to $4 205,23 million, in July 2014 from $3 966,27 million in July 2013. This was on the back of expansions of $191,72 million (82,54 percent) in net credit to Government and $32,03 million (0,87 percent) in credit to the private sector.
Net credit to Government grew to US$429,98 million in July 2014 from $215,53 million in July 2013,” the central bank noted.
The growth in credit to Government was largely driven by the conversion of foreign currency accounts balances amounting to about $203 million into Treasury Bills. The FCA balances were owed by the Central Bank.
In the monetary policy statement the RBZ said a total of $406 million Treasury Bills have been issued since the beginning of the year with the bulk of the TBs going towards the takeover of the bank’s debt by the Government.
Credit to the private sector grew by (0.87 percent) to $3 703,84 in July 2014 from $3 671,82 in July 2013.
This was partially a result of the persistent liquidity crunch as well as increased the risk aversion of financial institutions as they resort to precautionary lending as a way of mitigating the increase in non-performing loans.
Non-performing loans refer to those financial assets from which banks no longer receive interest and/or instalment payments as scheduled. The overall ratio of non-performing loans to total credit in the banking sector increased to 18,49 percent in June 2014 from 14,51 percent recorded in June 2013.