Some business people whose daily operations enable them to access money have taken to selling cash.
BY BUSINESS REPORTER
They have devised an elaborate scheme using social media application WhatsApp as a meeting ground where they advertise the cash to people in need and they offer large sums of money at high interest.
These people have organised themselves into a group which they have named “Greenway Traders Inc!” where buyers and sellers of cash meet. They deal with a minimum of $1 000 per transaction. Persons requiring cash have to transfer their money using the Real Time Gross Settlement (RTGS) system sending the amount required plus a 10% “commission”.
The group is believed to have been formed around May/June this year when the cash crisis began. One of the members of the group told Standardbusiness that to date the group had moved thousands of dollars in cash.
Most of the members in the group are in the retail and wholesale business, which has easy access to cash. The group membership had reached 213 as of Friday.
To get into the group, one has to receive an invite link after talking to one of the members. Once the link has been accepted, a person is made a member of the group.
At first glance, the group appears to be a platform where these traders advertise their businesses with several group administrators who help manage that part.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
One of the group administrators going by the name Darrel, who is believed to have started the group, handles the cash-selling part.
One of the members who spoke to Standardbusiness on condition of anonymity said, “You cannot ask Darrel for anything less than $1 000 otherwise you will not get it”.
Investigations revealed that a person interested in cash has to post their request after which Darrel directs the person to inbox him privately. There, Darrel hears the request and quickly provides details of the person to RTGS funds in exchange for cash.
When the third party comes on the scene, they instruct the buyer which bank to send the money plus the mark up.
Once the funds have been transferred and payment confirmed, he or she then gives the person the date, time and place to meet so the buyer receives their cash. Because the proof of payment by RTGS reveals the names and other details of the depositor and the receiver, it is difficult for any of the transacting parties to cheat.
The traders have also roped in bankers wherein one transfers the money directly into the account of the banker who would process the transaction. This is done to evade the new measures introduced by the Reserve Bank of Zimbabwe (RBZ) banning third parties’ involvement in RTGS transactions.
Speaking on condition of anonymity, a member of Greenway Traders Inc. told this publication that he used the platform to get cash for “school fees, small loans to people, rent, groceries and cash to keep the home going”.
An analyst said last week that indeed the practice was happening but not on a large scale. He also confirmed the involvement of some bank officials.
“Bankers are given what is called first preference, meaning it is easier for them to have access to cash,” the analyst said.
Investigations last week showed that bankers in one of the biggest banks in the country could withdraw the full stipulated $1 000 — RBZ-sanctioned withdrawal limit put in May — plus a 10% mark-up.
For these bankers, the 10% is split between them and someone else, usually the bank teller.
Bankers Association of Zimbabwe said bank executives had a duty to ensure their institutions conformed to the standards set by the regulator.
“Leaders in the banks have the responsibility to ensure that measures are in place to track account activities by their staff. Members of the public are encouraged to report such activities to the RBZ or to the individual’s bank Tip-Off Anonymous contact numbers,” BAZ president Charity Jinya said.
Last week, RBZ introduced a number of measures to curb illicit trading in cash after accusing some business entities and individuals of selling cash at a premium. The practice hampers the efficient and equitable circulation of scarce foreign exchange resources within the economy through the banking system.
“With immediate effect, suppliers of goods and services shall not accept RTGS or inter-account transfers made by third parties on behalf of their customers. For the avoidance of doubt, a supplier or service provider shall only accept payment emanating from the bank account of the customer making the purchase,” it said.
RBZ said the Bank Use Promotion and Suppression of Money Laundering Unit would be stepping-up monitoring activities to ensure that businesses comply with the legal requirement to bank all cash receipts.
“Inspectors of the unit will also focus on identifying illicit cash transactions and referring such cases to law enforcement agencies,” RBZ said.
RBZ data shows that last year, companies and individuals externalised $1,8 billion.
Zimbabwe National Chamber of Commerce CEO Chris Mugaga said the problem was that the RTGS balances attracted a different rate from the cash rate in terms of transactions, which made it enticing.
“Let us say you have got money in the bank or that there is a transfer, you will not get that money easily. At the end of the day you know that money will attract a discounted rate than cash really. So generally, I think it is very regrettable behaviour and it has got to be nipped in the bud,” Mugaga said.
He said the danger was that once limits were put, any form of exchange would attract a different rate.
“Whenever there is a cash crisis or there is what we call ‘information asymmetry’, the chances of manipulation of money is very high,” he said.
Consumer Council of Zimbabwe (CCZ) executive director Rosemary Siyachitema said measures must be put in place to curb speculative tendencies as people were finding ways to make the United States dollar a tradable currency by treating it as a commodity.
She said Zimbabweans were getting professional in finding ways around the legal way of doing things.
“We have to work together. If more of us put our shoulders together to work, we will transcend those [cash dependency] kind of problems. The issue of cash, on a bigger level, is that it is very psychological. We have been used to running around with cash. We were a cash economy and it made people feel that they are only fully people if they have got cash in their purses or pockets,” Siyachitema said.
She said CCZ sympathised with the people and urged the central bank to do more to promote point of sale machines.
