In a notable stride toward modernizing its financial landscape, the National Bank of Ethiopia (NBE) has unveiled a series of revised directives that are set to foster both security and innovation within the mobile money service sector. These reforms signal a pivotal moment in the nation’s ongoing pursuit of a dynamic and resilient financial ecosystem. The newly unveiled Payment Instrument Issuer Directive, introduced recently, stands as a testament to Ethiopia’s commitment to nurturing a competitive and innovative environment. By aligning these developments with the broader mission of the National Bank, this report delves into the intricacies of these regulatory changes, providing a comprehensive understanding of the transformation that is underway in Ethiopia’s mobile money landscape.
Transaction Limits and Exemptions:
- The NBE has raised the daily electronic account balance limit from Birr 30,000 to Birr 75,000 ($540 to $1300). This change offers greater flexibility for users, allowing them to store more money in their mobile money accounts.
- Notably, certain transaction types, such as utility payments, tax payments, airline ticket purchases, fuel payments, and bulk payments, are exempt from these limits. This facilitates essential financial transactions without constraints.
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Inclusion of Non-Banks:
- One of the most groundbreaking changes is the inclusion of non-bank entities in the mobile money sector. This marks a shift away from traditional banking dominance and introduces competition, innovation, and diversity in service providers.
Investment in Securities:
- Mobile money platforms are now authorized to facilitate users’ investments in government and private securities electronically. They can also handle payments related to these investments, including principal, interest, dividends, and returns. This expansion opens doors for fintech entrepreneurs to offer investment-related services.
Future Investment Features:
- The directive hints at the potential for mobile money platforms to offer more advanced investment features in the future. This could mean the ability for users to invest in assets like bonds or stocks via their mobile money accounts.
Financial Inclusion and Economic Growth:
- The overarching goal of these changes is to create a stable financial system that ensures every citizen has access to a diverse range of financial services. This not only fosters economic growth but also improves living standards for Ethiopians.
Detailed Requirements for Foreign Providers:
The revised directive includes specific and detailed requirements for foreign mobile money service providers who intend to enter the Ethiopian market. This ensures that foreign providers comply with local regulations and standards.
Securities Exchange Preparation:
- Ethiopia is gearing up to establish its first-ever securities exchange, with several state-owned enterprises designated as founding members. For fintech entrepreneurs, this development presents potential collaboration opportunities and a growing ecosystem for financial services.
Ethiopia mobile money platforms Ethiopia mobile money platforms
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 con