Harare – Ecocash Holdings Zimbabwe Limited (EHZL), formerly Cassava Smartech Zimbabwe Limited, says it continues to prioritise product innovation meant to provide relevant digital solutions despite the macro-economic hardships currently faced in the country.

In a statement accompanying the Group’s financial results for the year ended 28 February 2022, Ecocash said it has introduced numerous products in the market, including the automation of merchant settlements, self-care portal for EcoCash pin-reset, MARS laboratory tests for Covid-19, Vaya Services Fuel Monitoring, Vaya Smart Security, and improved the KaShagi digital loans.

The Group highlighted that to drive its digital banking model, Steward Bank also successfully deployed a new core banking system with enhanced features.

“Leveraging on the upgrade, our Square banking App was also upgraded as well as the online banking offer,” EHZL said.

Meanwhile, the Group recorded a commendable financial performance during the year, despite the economic challenges emanating from rampant inflation which is now the worst in the world.

The Group recorded a 26% growth in inflation-adjusted overall revenue to ZWL$29.9 billion.

EHZL’s EBITDA (Earnings before interest, tax, depreciation and amortization) margin rose by 3 percentage points from 15% to 18%. The growth was attributed to the Group’s strategy of focusing on cost optimization.

Along with the optimization strategy, 22% of the debenture holders redeemed their portfolios earlier in the financial year under review.

As the rampant exchange rate inflation continues to weigh on Zimbabwean-based companies as they can only legally report in local currency, EHZL recorded an exchange loss of ZWL1.2 billion in the year under review, a decrease from the ZWL6.3 billion recorded in the same period last year.

However, the Group’s long-term strategy of ensuring an even contribution of each subsidiary unit to the Group’s aggregate performance seems to be facing a dampened success owing to reduced demand for products in the economy.

As a result, the Fintech businesses continued to dominate performance after contributing 80% of the aggregate revenue, up from 77% in the prior fiscal year.

Insurtech business contributed 14% to total revenue, down from 15% in 2021 while Vaya Technologies contributed 6%.

The amass dependency on one unit for growth of the Group presents a threat to the going concern of the entire Group as volatility can weigh on the dependent unit and insolvency will be imminent.

Investors often seek companies that are widely diverse as this spreads the risk of running out of business. However, the tech business remains a luxury to an economy like Zimbabwe as a huge portion of the target market cannot afford the minimum exposure to such products.

Equity Axis News