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Retail chains such as OK have recorded an increase in point of sale purchases due to the prevailing cash shortages

Business Reporters

LOCAL retailers say the volume of point of sale purchases has increased significantly, as the cash crunch persists. This comes as some financial institutions are limiting withdrawals to between $50 and $200 for individuals while corporate account holders can only take $1 000 from $10 000 previously. The shortage of cash has persisted despite the Reserve Bank indicating that it had imported $30 million to ease shortages.The apex bank has also secured $200 million from Afreximbank to ease pressure on nostro accounts, which are used to make payments for purchases in foreign countries.

The shortage of cash has been attributed to growing pressure on the US dollar, as most regional currencies weakened against the greenback, despite imports being mostly in South African rand.

Meikles Mega Market general manager Panganai Ngorima said the unit of ZSE-listed Meikles Limited, has noted an increase in purchase transactions through point of sale machines.

“I can say we have witnessed an increase of about 400 percent in the use of POS machines since the cash crisis started,” Mr Ngorima said.

On the other hand, Mahomed Mussa Wholesalers general manager Sharif Mussa said there has been a significant drop in cash purchases since the cash crunch set in, with the majority of cash sales now restricted to the most basic goods.

“Volumes have been affected, as people used to come and buy using cash, but now have difficulties due to cash shortage, volumes and sales have dropped,” Mr Mussa said.

But Mr Mussa said the situation demanded that people use more plastic money, as directed by the Reserve Bank of Zimbabwe.

“We have POS machines at our stores and we fully support the push by the RBZ to move consumers towards the use of plastic money. We believe it is an option for the continued survival of people under these challenges,” he noted.

OK Zimbabwe chief executive Willard Zireva said POS purchases had recorded an increase, but would not quantify the growth in the use of plastic money to skirt the challenge.

“Of course there has been an increase (in POS transactions) because people have no cash and they have to use electronic cards for purchases,” he said.

“That (shortage of cash) will affect business because there are people without both cards and cash, but I cannot say to what extent this has affected business,” he added.

OK is the country’s second biggest retailer, by branch network, after Meikles Limited owned TM Supermarkets, which has partnered South African retail giant Pick ‘n Pay.

Zimbabwe is experiencing its most difficult period, in terms of liquidity in general and availability of cash, since the country adopted the multi-currency regime in early 2009.

While the country used a basket of foreign currencies, it has not been able to generate enough through exports, as industry remains largely incapacitated while balance of payment support and foreign direct investment remain low.

The country’s gross skewed import-export ration balance has resulted in most of the little cash and liquidity that finds its way into Zimbabwe finding its way out instantly. Cash is also being spirited out of Zimbabwe illegally.

To deal with the cash crisis, the RBZ recently announced eight policy measures that deal with the cash shortages and to stimulate exporters to produce more.