During the period under review, the Group introduced the EcoCash United States Dollar (USD) wallet in its quest to consolidate its participation in the USD economy. The reduction of Intermediated Money Transfer Tax (IMTT) on USD domestic money transfer transactions from 4% to 2% effective 1 January 2023 (now at 1%), helped in the adoption and use of USD on digital money transfer services. The Group also launched the EcoCash Junior wallet, a mobile wallet for children between the ages of 9 and 18, aimed at improving financial literacy and financial inclusion. According to management, this product is experiencing steady growth and will be key in the growth of the company’s subscriber base in the future. Steward Bank continued to grow its USD interest earning assets particularly in the corporate sector. This was coupled with an increase in FCA accounts which grew by 34%. During the year under review, EcoCash launched the Dura Pension Scheme, aimed at the informal sector to ensure broad-based inclusion of all workers in retirement planning. A new product that allows customers to get funeral cover as they purchase Econet data products, Data Life Cover, was also launched. The adoption of the USD packages has allowed the business to enhance life cover through assured USD benefits. Moovah, the short-term insurance business, embarked on a distribution network expansion project which to date has seen the business expanding to over 250 locations. Regardless, total revenue for the Group declined in real terms compared to same period last year on account of running inflation and transaction limits. Whilst the regulatory restrictive limits on the Mobile Money business, as well as the general cash economy on the USD transactions exerted pressure on the top line, significant growth was noted in transaction volumes and values following the reduction in IMTT from 4% to 2% in January 2023. About 78% of total revenue was driven by the Fintech business followed by Insurtech a t 17% and lastly Digital Platforms at 5%, in line with prior year’s performance. The Group’s EBITDA margin declined year on year mainly due to increasing costs on the back of a hyperinflationary environment. As a result of the exchange rate movements over the last twelve months, the business recorded significant debentures related foreign exchange losses which represented 38% of revenue eroding any possibility of achieving an accounting profit. The Board initiated a capital raising process to facilitate redemption of the Company’s debentures which matured at the end of April 2023. A Renounceable rights offer of US$30.3 million of new ordinary shares in the Capital of the Company is under consideration with the Company’s Board yet to approve.
