Econet Wireless, Zimbabwe’s leading telecommunications group, has approved the demerger of Cassava SmarTech (“Cassava Zimbabwe”) from Econet Wireless, and the separate listing of Cassava Zimbabwe on the Zimbabwe Stock Exchange (“ZSE”). The board’s decision is expected to unlock significant value for shareholders.
The demerger, which is expected to receive shareholder approval at EWZL’s AGM scheduled for 29 November 2018, should see Cassava Zimbabwe listed on the ZSE by 11 December 2018.
Eddie Chibi, CEO of Cassava Zimbabwe, says Cassava has evolved from a mobile money transfer service to a diversified “smartech” business. The vision for the company has always been that of becoming a fully-fledged smartech business, but a deliberate decision was taken to start with EcoCash, the mobile money platform, before expanding to other areas.
By offering a solution for customers to complete financial transactions directly from their mobile phone, EcoCash has revolutionised financial inclusion in Zimbabwe, a country where over 65% of the population still reside in rural areas with limited access to financial services. Today, it is the largest mobile payment platform in Zimbabwe and is used by over 80% of the country’s adult population.
The success of EcoCash has unlocked a number of opportunities that characterise the digital economy, and Cassava sees great untapped potential across all areas in which it has expanded, such as insurance, remittances, ride-hailing, and mobile e-Commerce. “Almost every industry today is ripe for disruption from digital technologies. Cassava has a proven track record of developing, launching, and scaling new smartech operations. Combining these with our passion for innovation, we believe we are on a path to consolidating our position in leading the smartech revolution in Africa, starting with Zimbabwe,” says Darlington Mandivenga, CEO of Cassava SmarTech Group.
“Ensuring unprecedented access to our services remains a key part of our vision. As we diversify, play in new spaces and offer new smartech solutions, we want to focus on offering a seamless experience to the customer and move towards more integrated offerings. Our suite of smartech services should be able to speak to each other. Given the diversity of our services, and the integrated model we operate, those that track and understand our business have often described us as the Tencent of Africa,” adds Mandivenga.
Attesting to the success of its model, Cassava has won numerous awards, including the Best Beats First Award from the London Business School in 2018, and the Best Mobile Money Award in the World from the GSMA Global Mobile Awards in 2017, as well as the Best New Retail Bank in the Global Banking and Finance Awards.
While the full potential of the digital economy is yet to be exploited, Cassava is already making an immense contribution across many sectors of the economy, and is now the single largest private provider of jobs in Zimbabwe. “We provide a livelihood to over 50 000 people and touch the lives of more people than any other business in Zimbabwe,” says Chibi.
The insurance arm, EcoSure, is the largest insurance company in the country, over 1.2 million students access educational support through the EduTech platforms, while 80% of small-holder farmers use the EcoFarmer service.
Emilia Chisango, Cassava Zimbabwe’s Finance Director, says over the last three years Cassava Zimbabwe has seen its revenue grow by double digit figures, more than doubling in the financial year ended on 28 February 2018, to US$258 million. Over the same period its profit also increased with almost 300% to US$71 million.
The demerger from Econet will not only unlock value for shareholders, but operating independently will allow the Cassava Zimbabwe management team greater focus on the implementation of its strategy. “The demerger still affords EWZL and Cassava Zimbabwe scope to continue collaborating and expand independently of each other, whilst recognising and exploiting the inherent synergies between them,” adds Chisango.
After the demerger Cassava will own 100% of EcoCash (Pty) Ltd and Steward Bank Limited, 85% of Econet Life (Pty) Ltd, and 90% of Econet Insurance (Pty) Ltd.
*As at end of trading 31 October 2018