Ethio Telecom has launched its long-awaited micro-credit and savings scheme using its Telebirr mobile money platform.
Telebirr Mela, Telebirr Sanduk, and Telebirr EndeKise were launched yesterday at Skylight Hotel in conjunction with Dashen Bank.
Telebirr Mela is a microloan business that allows customers to take out modest loans without collateral depending on their credit score.
Telebirr Sanduk allows consumers to save money and earn 7% interest on it.
Meanwhile, Telebirr EndeKise permits users to overdraw on their telebirr account if they do not have enough funds to finish a transaction.
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Here Is What You Need To Know
- The digital financial products are accessible via the application and telebirr’s USSD number.
- The maximum loan limit on telebirr Mela is now 10,000 birr for individuals and 100,000 birr for businesses. The overdraft has a limit of 2000 birr and is solely accessible for payment.
- Telebirr customer credit scores will be calculated using six-month telebirr transactions and telecom consumption.
- Telebirr users will have to actively use Ethio Telecom’s voice, data, and telebirr to pay bills, among other data points, to increase their loan limit.
- The frequency of loans accepted by users, as well as the time it takes to repay the loans, are factors in determining the loan amount and interest rate.
- Users will pay 1% interest on daily loans, 3% to 6% interest on weekly loans, and 6% to 10% on on monthly loans.
- The National Bank of Ethiopia (NBE) gave Ethio Telecom the green light in May of this year, and the state-owned telecom has been working on it since.
- Dashen Bank, a 26-year-old bank that made 1.73 billion birr in earnings last year, provided the loan funds. Dashen Bank mobilised almost 75 billion BR in deposits during the same period, a 39 percent increase.
TeleBirr Now Has Over 22 Million Users
The telebirr digital payment platform had over 22 million customers and processed over 32 billion birr in electronic money transactions. The platform has 13 banks and 37 international remittance service providers integrated.
Ethio Telecom began granting consumers who ran out of pre-paid airtime credit in 2018. Ethio Telecom’s airtime credit is used by 2 million subscribers per month, with a monthly loan value of 1.1 billion birr, according to a 2020 study. In 2020, Ethio Telecom is expected to earn a net revenue of 200 million birr from this service.
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Telebirr’s loan service comes as Safaricom prepares to establish telecom services in Dire Dewa, a city in eastern Ethiopia.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh