1. Key Note Address
By
Reserve Bank of Zimbabwe
At the Agent Banking and Digital Financial Service
Conference 2016
Theme ‘‘Leveraging Technology to Achieve Socio-
Economic Transformation’’
Hosted by Mtilikwe Financial Services
14 July 2016

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Distinguished Guests,
Ladies and Gentlemen,
Let me start by thanking Mtilikwe Financial Services for
organising this conference and secondly for inviting the
Reserve Bank to speak on this occasion.
It is indeed an honour and great privilege for me to speak at this event on
“Agent Banking and Digital Financial Services Conference 2016”
especially during this time when Technology is taking over or has taken
over.
1. Essentially, digital financial services and new technologies offer
great potential to overcome massive developmental challenges and
make significant contributions towards achieving universal access
to financial services in the country. With easy access to financial
services comes development and economic growth.
2. Agent Banking refers to the provision of banking services, as
approved by the Central Bank, on behalf of a registered banking
institution under a valid agency agreement. It involves the delivery
of banking services outside traditional bank branches, through
strategic arrangements with existing retail businesses. The brick
and mortar strategy for presence is long gone. In comes technology
(mobile or web-based technologies) and agent banking.
3. Digital Financial Services (DFS) therefore offer fast, easy and

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convenient access to financial services by permeating the
geographical distance barrier to financial services, and reducing or
doing away with time required to travel to an access point. ACCESS.
What is also critical in all this is the cost of that service.
4. The digital financial services industry in Africa has grown
tremendously in the last few years. Demand for financial services
has been spurred largely by the emerging middle class (Techno-
savvy group), which has tripled over the past 30 years to more than
34% of the continent’s population, according to a 2013 Report on
Financial Inclusion in Africa by the African Development Bank.
5. To this end, domestic, regional and international financial services
groups are re-focusing their efforts to expand the menu of digital
financial services to meet the growing needs of different classes of
consumers. The thrust of Financial Inclusion is now quite topical in
most jurisdictions with most countries now adopting strategies that
involve Inclusive Economic Growth and Development.
6. According to estimates by the AfDB, digital banking in sub-
Saharan Africa is projected to grow by 15% per annum by 2020,
bringing the sector’s contribution to GDP to 19%. (Refer GDP
contributions).
7. Over the last few years, the growth in digital financial services in
Africa has largely been triggered by a boom in mobile technology.

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In 1998, there were less than 4 million mobile phones on the
continent. By the end of 2015, that figure had risen to 841 million
and is projected to continue growing, establishing Africa as the
second-largest mobile market by connections after Asia, and the
fastest-growing mobile market in the world.
8. In its pursuit to achieve financial inclusion, Zimbabwe launched a
comprehensive National Financial Inclusion Strategy (NFIS)
early this year. The major objectives of NFIS are to increase the
overall level of access to affordable and appropriate formal
financial services within the country to 90% by 2020. It is also
intended to increase the proportion of banked adults from 30% in
2014 to 60% by 2020.
9. The NFIS proposes specific measures and targets that enable
prioritisation of the currently under-served and marginalised
groups. It revolves around four pillars namely: Financial
Innovation, Financial capability, Consumer protection and
microfinance. Financial Innovation intertwined with the Digital
Financial Services.
Agent Banking and DFS Landscape in Zimbabwe
10. The Reserve Bank has, in the past, instituted a number of initiatives
to broaden access to financial services embracing the rapidly
evolving ICT consistent with the ZIM-ASSET, sub-cluster of
Monetary and Financial Reform Measures.

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11. Zimbabwe has witnessed the agent banking and DFS being
employed as effective tools to bring on board the poor, low-income
households, marginalized demographic groupings such as women,
youth as well as Micro, Small and Medium Enterprises (MSMEs)
through the financial inclusion agenda. 22% of adult population is
financially excluded; 30% of adults are banked: FinScope
Consumer Survey 2014). (Refer Steward Bank using the Ecocash
platform)
12. Increasingly, Agent Banking model is being recognized as efficient
and cost effective delivery channel of financial products and
services. The time for Brick and Mortar presence is gone. And that
model was expensive – imagine the cost of the building/rental;
maintenance, water and rates; insurance; security; CIT; numbers of
workers among other costs. No wonder bank charges in Zimbabwe
remained high - there are too many overheads to be covered.
13. There are currently over 3,000 Agent Banking outlets operational
country-wide and these have increased the proximity of financial
services to clients, particularly those previously unbanked. (Refer
spate of branch closures which took place in the early 2000s -
international banks started consolidating their branch networks).
Most of these branches were inherited/bought by indigenous banks
some whose fate we all know. That meant some areas which
previously had banks were now without any banking services when
the indigenous banks headed west.

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14. Allow me, Ladies and Gentlemen, to just talk about something
which has been with us for a while but its use was limited to the
main city centres – Use of Cards (Plastic Money). Zimbabweans
like cash transactions and until the advent ofthe cash shortages very
few people used plastic money. The distribution of the
infrastructure which includes POS and network systems as well as
the costs associated with such payment platforms were the major
factors contributing to low usage. The improvement in network
connectivity and power supply has seen an increase in the POS
machines from 3,000 in 2011 to around 18,000 as at the end of June
2016.
15. Mobile payment agents have also grown significantly from 6,900
in 2011 to over 39,000 by end of June 2016. This amply illustrates
the power of the mobile phone in the modern world and how far the
mobile phone can go in enhancing financial inclusion.
16. The Bank will be issuing Agent Banking Guidelines in due course.
The Consumer Protection Guideline is currently at stakeholder
consultation level before it is issued to the market. It is important to
note that innovation and technological advancements always
precede legislation.
17. In addition, the banking sector has since enhanced their delivery
channels through the introduction of digital financial services
related products leveraging on the active mobile and internet

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penetration rates of 96% and 48% respectively as at 31 December
2015.
18. While banks previously thought the MNOs were encroaching into
their domain, they have since realised that given the current
technological developments, they cannot sit by. They have now
embraced the MNOs and there is a lot of co-operation between the
two sectors. At the end of the day it is the customer who should be
satisfied with the products being offered.
19. In support of the DFS, Zimbabwe over the years has also
modernised its payment, clearing and settlement systems. Both
large value time critical systems (RTGS) and retail systems
including card, mobile and internet banking are already operational.
20. The financial sector players in the country have all adopted use of
modern electronic payments means which have brought
convenience to the transacting public.
21. The glaring examples are the collaboration with non-banking
institutions which include three mobile payment providers
(Ecocash, One Wallet and Telecash) and international (VISA,
MasterCard, Union Pay International) as well as Zimswitch the
local switch.
22. The local statistical data shows that, the payment systems volumes
and values have increased considerably in the recent past. For the

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year ended 2015, a total of 22 million e-payment transactions
valued at $5.2 billion were processed, a phenomenal increase from
a mere 3 million transactions valued at $367 million in 2010.
The number of cards issued is standing at 2.6 million and continues
to grow.
23. Parallel to that, a total of 228 million mobile payment
transactions valued at $4.6 billion were processed in Zimbabwe
in 2015, an increase from around 400 000 transactions valued at
$1.2 million in the 2010.
RESERVE BANK AS REGULATOR
24. Central banks across the globe, are involved with digital financial
services in three main ways, which are capacity, supervisory and
regulatory roles.
25. Ladies and Gentlemen, the Reserve of Zimbabwe, as the regulator
of the payment systems and the banking sector, continues to
encourage payment system providers and banking institutions to
embrace new technology and put in place necessary risk
management structures to mitigate risks associated with
technology-based products.
26. The Bank continues to shape the regulatory framework in line with
the ever-changing financial services landscape in terms of
technology and related banking products. The major thrust for the

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Bank is ensuring an inclusive and stable financial sector.
27. The Bank is currently seized with the development of an
Electronic Transactions Guideline which is all-encompassing.
The Bank is working with all key stakeholders including Technical
Assistance from the World Bank to have the guideline ready before
the end of 2016.
28. In this respect, we are co-ordinating and cooperating with other
financial sector regulators and other public authorities for
telecommunication, information technology, consumer protection,
competition, amongst others. The Bank has MOUs with other
regulators and this helps as the new products being launched cut
across regulators. This ensures that there is no regulatory arbitrage.
29. In the digital financial services arena, recent developments have
resulted in the reduction of transacting charges which will enhance
the usage and promotion of a cashless/cashlite society.
CONCLUSION
30. In concluding, Ladies and Gentlemen, the Digital Era is here and if
one does not embrace it, there is a serious risk of being left behind
and left behind for good. Institutions need to continue to be
innovative and come up with products which benefit the consumers.
31. The Central Bank stands ready to provide a supportive regulatory

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framework which allows for innovation taking cognisance of our
thrust for inclusive growth by ensuring that the unbanked and
under-served populations in the economy are brought into the net.
We also remain focussed on ensuring that the country’s financial
sector remains safe and sound.
32. I am confident that deliberations at this conference will focus on
strategies that will enhance the development of digital financial
services in Zimbabwe.
I Thank you