Egypt to grow e-commerce.

Egypt to grow
e-commerce

New plan aims to double
size of industry by 2020.

ITWeb Africa

Tuesday, Apr 24th

Econet Wireless, Untu Capital partner to launch mobile money bond platform

Econet Wireless, Untu Capital partner to launch mobile money bond platform

Zimbabwe's Econet Wireless, touted by analysts as best placed to develop mobile money offerings alongside Safaricom, has opened a mobile money bond purchase platform in partnership with Untu Capital to raise US$1 million in support of local start-ups - specifically to address the low level of funding in this space.

Purchases for the u-Gain bond start from US$50 and can be transacted via mobile wallets on the EcoCash platform which has over 5 million registered subscribers.

In a text message sent to subscribers on Wednesday, EcoCash said bonds could be purchased via mobile phones and subscribers could earn interest.

"Our customers will, over a 30-day period, be able to use their phones to buy U-Gain bonds that they will redeem after a 12-month period for a 9 percent interest, way above the interest depositors currently earn with most banks," said Natalie Jabangwe, the head of EcoCash..

Analysts at Exotix Capital say African telcos have to integrate "other payment offerings already in the market, such as banks" into their platforms to derive move value.

They said "Safaricom and Econet are best placed to successfully monetise a merchant payments platform with their high active customer" penetration rate. Econet has since added an EcoCash Investa option onto its mobile money menu featuring the bond purchase option.

According to Exotix Capital research into the Sub-Saharan Africa telecoms industry, "Mobile money's ultimate success is derived from conversion of cash payments into electronic payments, facilitating more money in its ecosystem. This enables the telcos to offer 'banking' products such as deposit taking and lending without having to keep up with hefty banking regulations."

Jabangwe also said bond holders can trade their holdings on the Financial Securities Exchange in Zimbabwe. EcoCash also allows bill payments, bank to wallet transfers and wallet to bank transactions among others.

"And so a customer can hold their debt notes for 12 months, after which they are guaranteed payment of their initial subscription, plus 9 percent interest. Or they can sell the bonds on the market, on the Financial Securities Exchange, for a return determined by the market," she added

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