Homelink offers quick, safe and convenient money transfers

Hopefully they have a good idea of how the system works. Some, however, may not be too sure.

Homelink represents a network of money transfer agencies, through which money can be sent from abroad to Zimbabwe legally and quickly, with no commission or fees being paid by the person receiving the money in Zimbabwe.

There are about 20 money transfer agencies in Zimbabwe licensed by the Reserve Bank. Each has a foreign money transfer agency partner or partners.

Zimbabweans abroad wanting to send money to their families or friends, to an investment, savings or mortgage account or to any person, institution or organisation need to send the money through one of the money transfer agents partnered with a registered money transfer agency in Zimbabwe.

They would be wise to shop around to find out how much commission various agencies charge. Foreign international agencies all charge commission but the rate varies from one to another.

The transaction does not take long. With most of the well-established money transfer agencies the money is available for collection in Zimbabwe within 10 or 15 minutes of its having been paid to the money transfer agency abroad.

The transfer should not take more than 24 hours at the most. Should anyone find the transaction takes any longer than this, they should report the matter to the Reserve Bank of Zimbabwe, which will look into it.

The person collecting the money can choose to receive the money in foreign or local currency, unless the sender has already specified which currency it is to be paid in.

Individuals can open foreign currency accounts with foreign currency sent to them through the Homelink system, if they wish. A minimum balance of US$200 is required for this.

Most people prefer to be paid in Zimbabwe dollars, as they need to use the money in Zimbabwe. The Zimbabwe dollar is the only legal tender for purchasing goods or services within Zimbabwe.

If the recipient decides to receive the money in foreign currency, he or she can use it to travel or purchase goods outside the country. If he or she later decides to convert the money to Zimbabwe dollars this has to be done through a registered foreign currency dealer, which means through a commercial or merchant bank. The bank will charge commission.

One of the advantages of receiving the money in Zimbabwe dollars is that no commission is paid by the recipient. If the money is received in foreign currency and later changed at a bank, the bank will charge commission of up to 0,5 percent.

Receiving the money in Zimbabwe dollars also benefits the country more, since the foreign currency equivalent then becomes available to the foreign currency auction, where companies and individuals bid, through their banks, for the foreign currency they need for imports and other purposes.

Many of the Zimbabweans spoken to by the Reserve Bank mission to Zimbabweans in the United States, United Kingdom and South Africa were surprised that the money could be received in Zimbabwe in foreign currency if the sender or recipient wanted this. They were surprised that Zimbabwe had sufficient foreign currency to allow this and surprised because payment in foreign currency seemed to have no obvious direct benefit for the country.

Pay-outs in foreign currency have also been criticised by some economic commentators whose comments have been reported in some newspapers.

Reserve Bank Advisory Board Publicity Sub-Committee Chairman Herbert Nkala has included among the recommendations arising out of the committee’s recent visit to Zimbabweans abroad a recommendation that payments should only be made in Zimbabwe dollars.

However, at present recipients still have a choice to be paid in local currency or foreign currency.

If they are paid in local currency, as most people are, then the exchange rate that is applied is the auction rate or $5 200 to the US dollar, whichever is the higher. At present the auction rate, which as of June 24 was $5 348,92 to the US dollar, is higher.

The Reserve Bank has set out stringent conditions for the registration of Zimbabwean money transfer agencies to ensure that they are able to meet the requirement of immediate payment in local or foreign currency to the recipient of money transferred from abroad and have adequate capital and insurance cover.

The regulations are intended to ensure that money is transferred quickly, safely, reliably, conveniently and confidentially, the main hallmarks of Homelink-Kumusha-Ekhaya