OK Zim rebrands financial services unit

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OK ZIMBABWE says it will be branding its financial services unit to Vimbai Capital, as the group continues to expand and diversify its income streams.
“We want to expand on our money transfer agencies and insurance companies so that our financial services arm, which will be branded Vimbai Capital, will be a key focus area for the second half of our financial year (F24),” OK Zimbabwe’s chief executive, Maxen Karombo, told shareholders at the company’s annual general meeting.
He said the retail group is embarking on a new enterprise resource planning (ERP) system to manage efficiencies and enhance customer service.
“We will also be focusing on our strategic partnerships and as mentioned before, we have a strategic alliance with Shoprite Group of South Africa that will help us access a broad base of products from their group,” he said.

Karombo said the retail business is highly-susceptible to episodes of hyperinflation, with OK Zimbabwe experiencing an intense phase of hyperinflation throughout the first half of F24, which was primarily caused by exchange rate depreciation.
“So, from our retail channel, we experienced very weak consumer demand during the first half and the group itself operated volumes that were very severely below the business break-even point,” he said.
“In the first quarter, our volume performance was a negative 21,6 percent and the second quarter followed a slightly worse position at just under 24 percent and our year-to-date number is a 22,6 percent volume decline from last year.
“Given this environment, we have experienced rapid informalisation as consumers look for other sources and channels that offer a parallel market exchange rate as opposed to the formal channel, which follows the letter of the law,” Karombo added.
He said reduced terms of trade from suppliers impacted volume performance.
“We are renegotiating some of the supply contracts so that we land cheaper prices for customers,” he said.
Karombo lauded the government’s decision to keep the multi-currency system in place until 2030. “This brings certainty to the currency system and will help all of us in business in our planning processes and also in looking at new market confidence,” he said.
He also lauded the policy-makers’ suggestions to eliminate intermediated money transfer tax (IMTT) on bank card transactions and the 10 percent cap on the currency rate that formal shops can utilise.
“This helps boost consumer spending power. So, we await the promulgation of the necessary instruments to effect these positive changes. For the industry and particularly in our business, macroeconomic stability will be helpful in helping us to recover our lost portfolio base,” Karombo said, adding the group faced increased operational costs, particularly from property rentals, electricity, labour, security and training services.
“Given the steep rises in costs, we will optimise our cost initiatives across our operations by streamlining processes and implementing various efficient measures to reduce our overheads,” Karombo said in his outlook.