The Influence Of Ecocash On Zimbabwean Commercial Banks’ Strategies (2011-2013)

ABSTRACT

This study focused on the influence of EcoCash on commercial banks’ strategies in Zimbabwe. The study was motivated by the fact that banks failed to ensure financial inclusion and to take advantage of unbanked market and this resulted in Econet seeing an opportunity and launched EcoCash. EcoCash has had a huge impact and its accounts exceed total bank accounts. Objectives of the study were to examine reasons for the emergence of EcoCash, to assess the influence of EcoCash on Zimbabwean banks’ market, to explore strategies put in place by banks in light of entrance of EcoCash into the financial sector, to analyse sources of competitive advantage for Zimbabwean banks, and to propose a model that brings collaborative synergies between EcoCash and the Zimbabwean banks. The study reviewed literature related to strategy, competitive advantage, the emergence of MMT services in Africa and influence of MMT on banks’ market. The study population was comprised of employees and managers in 16 commercial banks, RBZ, and BAZ. The researcher used a mixture of probability and non-probability sampling techniques. Self-administered questionnaires and structured interviews were used as research instruments. The study found out that EcoCash was prominent because commercial banks failed to exploit the unbanked informal market. EcoCash resulted in decline in bank deposits and clients closed their accounts. Nevertheless, commercial banks have competitive advantage in terms of being able to process high value transactions, and facilitate international transactions. The study recommended that there was need for commercial banks to ensure training of employees and to empower employees through participation in decision making. It was also important for the financial institution to ensure a high level of employee motivation. Motivation of employees would be starting point of ensuring customer satisfaction because human resources are sources of competitive advantage. Another recommendation was that commercial banks should invest in research and development and come up with new, unique products and research should be conducted so that banks are aware of expectations of clients. It was held that banks were facing stiff competition from EcoCash, therefore, they needed to ensure that alliances signed with other companies are effective. For example, the bank could have fully exploited its partnership with EcoCash and ensure convenience to clients. New strategic alliances, for example with funeral assurance companies like Nyaradzo, could be sought. The researcher recommended that a study on effectiveness of commercial banks’ human resources strategies be conducted. This was because of the fact that the researcher discovered, during the conduct of study, that human resources are sources of competitive advantage for any company. Therefore, having effective human resource management practices would ensure customer satisfaction and commercial banks would be able to retain clients.