Harare — This is a new weekly column in which the Reserve Bank of Zimbabwe explains what Homelink is all about, tries to correct any misunderstandings there may be about it and answers questions, that may arise in relation to it.

IT was the decision by the Reserve Bank of Zimbabwe to put in place a money transfer system to enable Zimbabweans living abroad to send money home safely, reliably, quickly and conveniently that gave birth to Homelink-Kumusha-Ekhaya.

Homelink-Kumusha-Ekhaya is a concept or slogan that has been used to make people aware of the new money transfer system. It has become a brand name used to popularise this system that helps link Zimbabweans abroad with their families at home by providing them with a safe means of sending money home.

The Homelink system links Zimbabweans abroad not only with their families but with their country. It can be used to invest money in property or interest-bearing instruments, such as the new Diaspora Bonds.

It also enables Zimbabweans abroad to contribute to their country's economic turnaround and economic development at the same time as they are sending money to their families or for their own investment purposes.

The money they send home through a money transfer agency that is part of the Homelink system is paid out to the recipients in Zimbabwe dollars. The foreign currency equivalent is made available to the foreign currency auction. It becomes part of the foreign currency which companies and individuals bid for, the bulk of which goes to companies that require it for productive purposes and essential imports.

When the system was introduced payment was allowed in either foreign or local currency. However, abuse of this privilege by some people who asked for payment in foreign currency and then sold it on the black market, resulted in this privilege being withdrawn.

Prior to the introduction of the Homelink money transfer system Zimbabweans were sending money home chiefly through various illegal channels. Some were defrauded in the process. Sometimes the money took weeks to reach home. Sometimes only part of it arrived home. Sometimes none of it reached the intended recipients.

Often the foreign currency never left the country from which it was sent. It was banked in somebody's foreign account and the Zimbabwean recipients were paid out in Zimbabwean dollars out of funds already in Zimbabwe. The country was thus deprived of the foreign currency that could have helped pay for essential imports.

The foreign currency went instead to help enrich those who had foreign accounts, who effectively externalised their funds by paying the beneficiaries of these illegal money transfers out of their Zimbabwean funds in return for foreign currency being paid into their foreign account abroad.

The new money transfer system established by the Reserve Bank of Zimbabwe and popularised under the Homelink brand name is designed to guarantee safe, reliable, fast and convenient money transfers and to ensure that the foreign currency does reach Zimbabwe and becomes available for sale on the foreign currency auction.

To guarantee this, the Reserve Bank has insisted on certain conditions that money transfer agencies registered with it have to abide by. These include insurance to cover money transferred through them, partnerships with reputable international money transfer organisations and ensuring they always have sufficient cash on hand to be able to pay the equivalent in Zimbabwe dollars of the money sent electronically to them.

The conversion rate used in calculating the Zimbabwe equivalent of the money sent is the auction rate or the new diaspora floor price of Z$5 600 to the US dollar, whichever is higher. At present the diaspora rate is higher than the auction rate.

No commission is charged by money transfer agencies in Zimbabwe on money sent through them. There is no tax or any other charge payable either.

Those sending the money will, however, be charged commission by the agencies in their country of residence through which they send the money. The commission varies according to the charges established by different money transfer organisations, making it worth shopping around for a competitive commission rate.

By asking their relatives abroad to send them money through a money transfer agency which has an agreement with a licensed money transfer agency in Zimbabwe, people can be sure of the money reaching them swiftly and safely and at the same time help the country's economy, as the foreign currency involved will become available to the foreign currency auction.

This is also a lawful means of transferring money home, kumusha, ekhaya. The risks of being caught dealing on the black market or externalising funds is therefore avoided.

In this weekly column it is hoped to respond to questions and queries that people have. Anyone who has questions they would like to see dealt with in this column can send them by e-mail to mhpr@mhpr.co.zw or by post to Homelink Column, Box MP97, Mount Pleasant, Harare.