HomeNewsAvoid cash shortages, queuing this festive season

Avoid cash shortages, queuing this festive season

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AS the yester-year great, the late Paul Matavire used to sing, Kisismusi yatosvika/Ikisimusi sifikile (Christmas is Upon Us) and the Four Brothers belted out Apenga nayo Bonus (super excitement brought about by the 13th cheque), the festive season is indeed upon us.

Clive Mphambela

As with most years, this time of the year heralds festivity and celebration and a lot of business activities will need to take place as families buy groceries, clothing and furniture and other goods synonymous with the merry-making season. Over the past few years, a trend has developed that sees banks crowded with customers withdrawing their money to facilitate the festive shopping extravaganza. Zimbabweans have over the years developed a culture of carrying hard cash and using hard cash for transactions, large and small.

Whether one is buying groceries for $200 or paying for a car worth $3 000, there is a huge bias for cash. This is in spite of so many alternative platforms available for people to avoid queuing in banking halls or carrying large amounts of cash which in itself poses a high personal security risk.

This “cash economy” as most of us now know it, however puts pressure on banks to provide adequate notes in bank vaults so that the banking public can have access to their money as the festive spending rises.

Seasonal cash demand

Since the adoption of the multicurrency system in 2009 there has been a growing demand for cash particularly in late November through to December. This natural seasonal increase in the demand for cash is caused by the need for increased cash holdings by economic agents to pay for various transactions. The bonus payments at the end of the year naturally result in people having a little bit more to spend.

The end of the year is a natural time for that extra spending on goods and services. Some also take the opportunity to settle those nagging long-time debts and obligations. But do we have to use cash? Banks have obviously prepared adequately for the increased cash demand and I am sure that a lot of cash has been imported from thousands of miles away to cater for the increased needs of the public. This leads us to an important point about use of US cash in the economy.

Cash is neither free nor cheap

Yes, this is true, especially when one starts to think about how that $50 note ends up in your wallet after the teller pays it to you. Whilst a lot of cash comes into the country through the borders as people travel into the country and leave their US dollars here after spending them on local goods and services, the bulk of the cash that is circulating in the country is directly imported by the banks in Zimbabwe individually, primarily from the United States.

The basic process involves the local banks having to make electronic transfers to their bankers in New York, who in turn pay the American Federal Reserve Bank of New York for the equivalent value in cash notes.

Once paid for, the notes are then released via a complex but secure process that eventually ensures that after a few weeks the notes eventually arrive in Harare.

The process is both lengthy and costly, as there are huge security, insurance and transport costs to be borne by the local banks as they endeavour to bring this cash convenience to the public.

Sadly, whilst at face value it may seem cheap to use cash, it is in actual fact very expensive to use cash all the time. Worse still, a lot of the cash that banks are importing at great expense is being exported by people as they travel to other countries to buy goods.
Conserving our cash

The banking public can help the banks in making sure that there is enough cash around by utilising alternative payment platforms and methods that banks have put at their disposal.

Use POS machines

Always use a point-of-sale machine with your ATM card whenever there is one installed in the shop. Most point-of-sale facilities also have a cash-back facility where you can get the extra cash you need in the same transaction that you pay for goods or services. Using POS-based facilities enables you to save yourself a trip to the bank or having to find an ATM.

Internet banking and electronic payment systems

Instead of queuing for hours just to do a bank transfer, sign up for Internet banking services with your bank and effect your transfers from the comfort of your home or office or on the move via tablets and iPads. Use this payment method for paying utility bills, and even personal debts. Develop the habit of asking for your creditor’s account details and transfer the money to them, rather than going to the bank and getting cash.

Mobile banking

There is now a wide variety mobile-based transfer platforms to choose from and the banking public is encouraged to use these convenient facilities, to send or receive money, pay for bills and groceries and to settle one’s debts from friends and family and even to pay for services rendered.

l Clive Mphambela is a banker and financial advisor. He writes in his capacity as Advocacy Officer for the Bankers’ Association of Zimbabwe. He can be reached on 04-744686, 0772206913, or clive @baz.org.zw

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