We just received one of those just-to-let-you-know, releases by Econet this morning. The release, sent out to assuage fears of Zimbabwe’s liquidity problems affecting Steward Bank and therefore the EcoCash mobile money service as well, basically says Steward Bank is very healthy and that there are controls in place to ensure that even it weren’t healthy (like a number of local banks), EcoCash wouldn’t be affected.
You may know that Zimbabwe is at a point now where a number of banks are failing. Trust Bank, one of the banks that have been struggling for a while now, had its license revoked by the RBZ about a month ago. Allied Bank, Met Bank and a few others have also been rumoured to be in liquidity trouble.
Here’s the full release:
Econet Wireless Chief Executive Officer Douglas Mboweni has declared that Steward Bank is safe, strong and liquid, and will not be affected by the liquidity crisis.
Mr Mboweni said since taking over the bank, Econet had implemented some tough restructuring of the institution, formerly known as TN Bank.
“We brought in experts who looked very carefully at what was needed to operate a bank successfully in a market with no lender of last resort. We cleaned up the balance sheet, wrote off bad loans, and fully recapitalised the bank. We eliminated all systemic weaknesses,” said Mr Mboweni.
The Econet CEO, whose company controls 100% of Steward Bank, said in a market with no lender of last resort, the shareholder of the bank must be very strong financially and the bank must be properly capitalised.
Mr Mboweni also said that funds from EcoCash are managed through a special trust arrangement set up with the approval of the Reserve Bank, and the trust has its own independent trustees, who have nothing to do with the bank or its shareholders.
“We do not touch that money. If you send money, we have it, and we do not on lend it. If every single person came for their money tomorrow, we will have it. We have every single cent of that money. If an agent fails to pay, we will pay, and if the bank fails to pay, Econet will pay.”
Mr Mboweni said that Econet Wireless founder, Mr Strive Masiyiwa, had directed that the bank, should be called “Steward” because “banking is about a sacred stewardship of other people’s money”.
5 comments
Its good news but the general national poor economic and financial nightmares, still has to be taken into the whole scene, ie getting a gvt or company payslip when money supposedly sent is not there or interbank transfers from non performing institutions.
@ Mike. The assurance is saying…move to us & stop banking in your suspicious bank because we have money
essentially, yes.
the truth is that they are liquid, thanks to the hard work they have done on the EcoCash front
go on… put all eggs in one basket…..