This document discusses strategies for Zimbabwe Posts to effectively manage liquidity and float for multiple digital financial service providers. It outlines Zimbabwe Posts' role in digital financial services including as an agent for international money transfers and mobile payments. Challenges are presented around funding floats for multiple providers and managing liquidity in cash-out areas. Solutions proposed include a shared float managed by the central bank, infrastructure sharing, and addressing high service costs. The conclusion emphasizes the need for cooperation between stakeholders to leverage new technologies for socioeconomic development.

1. Zimbabwe Posts (Pvt) Ltd
Leveraging technology to achieve
socio – economic transformation
Presented by Mr N. Moyo – Sales and Marketing Manager
1
Effective Liquidity and Float management
strategies to adequately serve the needs of
multiple Digital Financial service providers

2. 2
Presentation Outline
• Definitions
• Global Trends
• Local Trends
• Zimpost Role
• Factors for Effective Strategies
• Proposed Strategies
• Experienced Challenges
• Way Forward
Zimpost Beyond the envelope

3. 3
Definitions
Digital Financial services – this is delivery of financial
services to the unbanked groups through innovative
technologies like mobile – phone enabled solutions,
point – of – sale devices, etc.
The model is meant to reduce costs of service
provision to allow participation of low income groups
that were previously excluded from banking, and is
part of the broader vision and strategy of
financial inclusion
Zimpost Beyond the envelope

4. 4
Definitions cont’d
The Reserve Bank of Zimbabwe (RBZ) has classified
the DFS into two broad categories
Agent Banking – this is extension of the banking
services through an agent who is not in a brick and
mortar set – up.
Agent banking include services such as deposits,
withdrawals and account opening.
Zimpost Beyond the envelope

5. 5
Definitions cont’d
Mobile payment agent – these are mobile network
operators that offer financial services which include
money transfers, airtime top – up, merchant
payments, etc.
Money transfers remain the largest component of
mobile financial services.
Zimpost Beyond the envelope

6. 6
Global Trends on Money Transfer
Zimpost Beyond the envelope
• According to World Bank report on Migration and
development (2016 ) growth of the global MT industry
slowed in 2015 to $581. 6 billion from $592 billion in 2014
due to weakened economies and currencies vis-à-vis USD.
• Main uses of remittances are subsistence (70%), Education
(8%)and donations (5%)
• 47% of total remittances occur at brick and mortar
establishments, but majority are moving towards internet
based services
• Cost of sending reduced to 7,5% from 8.9%
and is likely to continue due to cheaper
internet based services.

7. 7
Global Trends on Money Transfer cont’d.
Zimpost Beyond the envelope
• MT users deem 2.4% as a fair fee for the service yet
operators normally charge between 8-10% with some
corridors incurring a 20% fee charge.
• MT operators are exploring the use of social media to
send and receive remittances- e.g. Xpress Money
using Face book and Web Chat
• 40% of migrants still prefer cash collections, 40%
prefer collecting money from banks and only 5% to
mobile wallet
• SOURCE INFOSYS MONEY TRANSFER INDUSTRY 2016 REPORT

8. 8
Local Banking Trends
Zimpost Beyond the envelope
•Approximately 1,1 million people in Zimbabwe have
a bank account, which is about 9% of the total
population
•Under its five-year financial inclusion strategy, the
central bank is targeting to improve access to formal
financial services from around 69-90%
•40 000 agents providing financial services
•35 000 mobile payment agents
• 3 000 bank agents
• SOURCE: RBZ Quarterly Report 2016

9. 9
Mobile agent payments
Zimpost Beyond the envelope
Year Volume (m) Value ($bn)
Growth
(Value)
2013 119.14 2.1
2014 178.51 3.6 71%
2015 228.2 4.6 28%
Source: RBZ January 2016 Monetary policy

10. Role of Zimpost in DFS
• Role for
Zimpost is
drawn from
article 5.10 in
the FIS
document.
• 226 outlets,
66% are in the
rural market.
• 155 networked
• 52 are to host
Community
Information
Centres

11. 11
Role of Zimpost– Digital Financial services
Zimpost Beyond the envelope
- International Money Transfer Operators

12. 12
Role of Zimpost– Digital Financial services
Zimpost Beyond the envelope
• Agent banking
• Mobile agent payments

13. 13
Zimpost role - Agent banking
Zimpost Beyond the envelope
Year 2013 2014 2015
Volume
(000) 635 657 449
Value ($m) 171 158 110
% Change (value) (8%) (30%)

14. 14
Zimpost role - Mobile agent payments
Zimpost Beyond the envelope
Year 2013 2014 2015
Volume
(000) 298 446 534
Value ($m) 63 178 201
% change
(value) 183% 13%

15. 15
Factors for effective strategies
Zimpost Beyond the envelope
•Business trends – monthly and seasonal
fluctuations
•Potential business – population size, new socio –
economic development initiatives in the locality
•Location
•Regulatory Framework

16. 16
Proposed Strategies
Zimpost Beyond the envelope
•Funding – a single float requirement that can
then be shared by all DFS providers.
•Agents also need to complement outflows
from cash-outs/withdrawals with cash –
generating transactions.
•Agents can also play the role of a super –
agent, which generates liquidity when they act
as deposit – takers for micro or
individual agents.

17. 17
Proposed Strategies cont’d
Zimpost Beyond the envelope
• Liquidity – the “bottom of the pyramid” needs to be
financially included; Finscope survey 2012 shows that
66% of MSMEs are found in rural markets, and if all
included, liquidity can be generated. RBZ estimated that
about $3bn is circulating in the informal sector.
• Demand for cash can also be reduced through plastic
money, by increasing numbers of point – of – sale
machines. According to RBZ there are 16 000 point – of
– sale machines in Zimbabwe which is equivalent to 300
per million people is far below international
standard of 1300 per million

18. 18
Experienced Challenges
Zimpost Beyond the envelope
• Funding – each principal requires a certain level of float
funding, resulting in large cash – outlay for an agent with
multi – digital financial services provider.
• Liquidity challenges – most unbanked areas are generally
cash-out/withdrawal prone markets.
• Removal of Human intervention for float
management(results delays that inconvenience clients)
• Risk of theft – conversion of funds to personal use by
agents.
• Multiple operational gadgets (cellphones and point – of –
sale machines) due to lack of infrastructure sharing policy.

19. 19
Way Forward
Zimpost Beyond the envelope
• Inter – operable and seamless digital financial
solutions
• One – float for agents handling multiple digital
financial solutions providers, probably to be managed
by the Reserve Bank.
• Sharing of infrastructure, i,e., point of sale machines
• Proactively managing convergence of markets due to
developments in ICTs.
• Participation of consumers for product developments
to address market needs.
• Address high costs of service provision

20. 20
Conclusion
Zimpost Beyond the envelope
Disruptive technologies call upon consumers,
operators, regulators, financiers and any other
stakeholder to expect changes in the way we do
things today.
In the face of disruption from new technologies,
it is important to continue cooperating for the
common good, i.e., the socio – economic
development of our nation.
I thank you!