Zimbabweans must cultivate a culture of saving through investment in stocks as pensions are not viable in economies that are largely informal, Escrow Group founder and CEO Collen Tapfumaneyi has said.
Tapfumaneyi (CT) made the remarks on the platform In Conversation with Trevor hosted by Alpha Media Holdings chairman Trevor Ncube (TN) where he spoke about the intersection between technology and finance, among other issues.
Below are excerpts from the interview.
TN: Greetings, welcome to In Conversation with Trevor, brought to you by Heart and Soul Broadcasting Services.
Today, I'm in conversation with Collen Tapfumaneyi, the founder and CEO of the Escrow Group.
Collen Tapfumaneyi, welcome to In Conversation with Trevor.
I'm excited to be chatting to you. I know you have been flying all over the world, all over the continent, making lots of money and doing a lot of exciting things.
First of all, you know, we are doing this episode with our colleague, friend, and brother, Blessed Mhlanga, in police detention for simply doing his work.
He is in our minds, he is in our prayers. We are angry; we are upset, because journalism is not a crime.
Blessed has not committed a crime. And we're praying and hoping that good sense and reason happens and he gets released.
Collen, we have to start with some heavy lifting. Your space, finance, and technology are colliding in a big way.
Talk to us about how technology is disrupting the space that you are in, in the first instance, and secondly, how you're dealing with that disruption.
CT: Well, this disruption is necessary. I think technology comes in as an enabler for more efficient markets.
I think the markets have been fairly developed; I think there has been a challenge regarding the inclusivity of our markets, accessibility of our markets, convenience, and all that.
So you'd realise that especially where I really play a lot, which is the stock market, capital markets.
In terms of inclusivity, you're looking at 1% included out of the entire population. 99% outside.
So because of that problem, innovation comes out of a challenge, and therefore you've got to innovate and come up with a solution.
So technology then addresses most of the reasons why 99% are excluded.
Security, convenience, efficiency, costs, all those things are factors that keep 99% out.
So the collision is necessary. It is deliberate, and this is where we find ourselves, I would call it convergence, between finance and technology.
Basically, it just means that someone who is herding cattle in Bikita, if they want to buy US$5 worth of shares, they must be able to do that.
TN: Can they do that now?
CT: Yes. They can do that.
TN: Talk to me about that, how you have been able to enable that.
CT: So basically, again, we bring in the technology, that is the automation, and then we look at it and say, what are the barriers that stop everybody from having equal access to the market?
And we realised accessibility, because previously you have to look for a stockbroker, and you sit with the broker, and go through the process.
And the process for you to successfully start buying shares included having a relationship with your broker, with your bank, custodian bank, having a depository account, having your records with the transfer secretary.
There are four or five entities that will have to know you, which means you have to fulfil all of their requirements that are varying.
Some want 10 forms, some would want ID, and all that.
So you can imagine what it would take for you to actually have an account so that you start investing.
So with that, we just said, now we have technology, telecommunications technology.
TN: How have you simplified it? What have you done?
CT: Basically, putting together an application that is accessible on the everyday gadgets that people use.
TN: What is the application called?
CT: It's called C-Trade. C-Trade. We developed C-Trade in such a manner that it takes advantage of the mobile penetration that we have.
So almost everybody has a mobile phone, has a mobile number, and a mobile money account.
And we built a technology that would be accessed through USSD, just a short code.
And you are in, you register, and there is a mobile app version, and there is an internet or online version.
So basically, for those with feature phones, without data, without network access, and all that, they are catered for.
So wherever you are, as long as you have network access, and you have a mobile wallet account, just dial a short code, go through the process, register, and boom, you're able to buy shares.
TN: Are you seeing an uptick in your business as a result of this technological enablement with the USSD facility?
CT: Yes, the uptick has been steady. I think access and convenience is one thing.
Then financial literacy is another big thing.
In our five, six years, we have been able to register more than 30 000 citizens who have onboarded.
Now, registration is one thing. Transacting is the other thing. We have been having quite some good traction.
So for example, on a good day, the platform contributes in terms of number of transactions, It contributes in excess of 70% of the transaction activity.
So what we have done is to allow somebody to buy, like I said, US$5 worth of shares, US$2 worth of shares, and if they can find the shares.
So now comes the question: supply of those small numbers of shares, the understanding by our people in terms of the mechanics of trading, and there's still a lot of work to do.
But having 30 000 to start with is a good start.
Obviously, it needs collective effort from everybody to ensure that the message goes to the targeted audience.
TN: What's that collective effort? What does that collective effort look like?
CT: Just to take a step back, what we did was to say within that app, when you register on C-Trade, you are able to register an account with a stockbroker, with a custodian bank, with the depository that is the central depository, with the transfer section, everybody in the value chain instantly.
So just going through that, if you are on EcoCash, we use EcoCash KYC data and all that.
So it's an instant thing. But because it's an ecosystem, you then need the same players in the ecosystem to come together.
So banks would have thousands of customers that would also be interested in trading.
So they need to contribute, stockbrokers, stock exchanges, and all that.
So once we have that collective effort, you are then raising awareness in our various spaces, because we now have a tool, a facility that everybody can utilise.
Our regulator, because we are in a regulated space, our regulator, the Securities and Exchange Commission, they are doing their part, raising awareness and all that.
But we need to go further. We need schools to be talking about it.
We need parents to be talking about it. We need this to be talked about in churches.
TN: Why do you say that?
CT: I say that because investment is just not an elitist thing.
It's necessary because we are looking at investing for your future when you retire.
What happens when you get to 60, 70 and you can no longer work?
Our pension systems have not really worked very well. So what we need to encourage is people to have savings.
So our economy has become partly informal.
So that informal sector, you wonder what the situation will be like 15, 20, 30 years from now.
This is where we are saying, if we put all our efforts, come together and ensure we bring in a culture of saving.
Before we even talk about investing, a culture of saving.
Every dollar you earn, if you put aside a few cents, you're actually doing something. 10% is a magical number.
I will ll tell you a story about the 10%.So when I got involved in the stock market and interacting with investors and all that, there's one gentleman that...
TN: What's his name? Do you want to share?
CT: We share names here for purposes of inspiration and recognising people, yeah? He's late.
You would know the name, Roy Tanner. He was a prolific investor.
And Roy Tanner was very diligent in his affairs.
So we had very good rapport with him because he would go around chasing after his dividends, chasing after his shares and all that.
So you would know 10, 15, 20 times a year you are likely to meet Roy Tanner.
So obviously, you start communicating, conversing and all that.
So we wondered because when you looked at his portfolio, it was quite massive.
In some big companies, he was even in the top 10 shareholders. So, very wealthy.
So we were just curious to know how he did it.
TN: What made him have such substantial investments?
CT: So he just said, right from when he was, I think, 18, 17, 18, he was just putting aside 10% every time.
Every time he got some income, a percent. And by the time he retired, the value of his wealth was enormous.
So he's one example where you say saving, investing, especially in capital markets, work.