The National Bank of Ethiopia (NBE) announced that it has granted a mobile money service license to Safaricom M-Pesa Mobile Financial Service Plc, a subsidiary of Safaricom Telecommunication Ethiopia Plc. This is the first time a foreign investor has been granted a mobile money license in Ethiopia, where a dozen local fintechs and 30 commercial banks already provide financial services.
M-Pesa was granted the license six months after the Ethiopian government enacted a revised National Payment System Proclamation, which permits foreign companies to engage in payment system operations. The NBE stated in a press release that granting the license to M-Pesa reflects its commitment to fostering financial innovation and inclusion in the Ethiopian market.
The license will enable Safaricom’s subsidiary to roll out mobile financial services in Ethiopia, which is Africa’s second most populous nation. However, it will face stiff competition from Ethio Telecom’s TeleBirr, which has acquired 30 million users since its launch in May 2021, demonstrating the market’s potential. In recent years, the menu of digital finance offerings, including mobile banking, mobile wallets, internet banking, and card banking, has expanded rapidly.
read alsoTanzania Is Witnessing A New Wave Of Fintech Licenses. Pesapal Joins
The Central Bank welcomed the shift towards the use of digital financial services, citing the benefits of increased efficiency, safety, and transparency in the rapidly growing financial system. Looking ahead, the NBE stated that it will continue to take measures to deepen Ethiopia’s digital finance ecosystem and promote the introduction of diverse forms of digital financial services. The bank also expressed its support for the spread of digital payment systems as a substitute for cash-based transactions within the economy.
“The National Bank of Ethiopia wishes Safaricom’s M-PESA service well as it launches its operations in the very near future,” the NBE added.
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