Policy & Regulations - Afrikan Heroes

Here’s How The New Payment Service Bank License Given To Glo In Nigeria Will Work

October 11, 2022

Nigeria’s Glo-bacom has made the official announcement that it would be launching MoneyMaster PSB, its payment service bank business. MoneyMaster PSB is licenced by the Central Bank of Nigeria (CBN) to assist in the provision of financial services to millions of Nigerians who do not have bank accounts or who have underbanked accounts.

The digital solutions provider made these remarks in a press statement that was issued in Lagos “Our overarching goal as a company is to continue to have a positive impact on the lives of Nigerians by making a wide variety of possibilities available to them. MoneyMaster extends this goal by targeting the unbanked and under-banked with G-Kala, which is the company’s main product. This is done with the intention of increasing the level of financial inclusion in Nigeria.” Along with other Payment Service Providers (PSBs), MoneyMaster PSB will facilitate payment and remittance services within Nigeria, accept deposits from individuals and small businesses, issue debit and prepaid cards, operate electronic wallets, and carry out other services in accordance with CBN regulations.

It is anticipated that MoneyMaster will make use of Globacom’s pan-Nigeria reach and substantial agent presence in both rural and urban regions in order to accomplish its goal of massive roll-out. This would give MoneyMaster a significant head start once it begins operations. Because MoneyMaster PSB is not network-specific, the only thing a client has to do to establish an account is dial *995# and then follow the directions from a Glo line or from any other telecommunications network. This may be done to open an account.

MoneyMaster PSB is in a position to redefine the landscape of payment service banks while driving financial inclusion in Nigeria, much like Globacom did for the telecommunications industry in 2003 when it began operations with cutting-edge technology and one-of-a-kind products. In the same way, Globacom revolutionised the telecommunications industry.

“The fact that the customer’s phone number will serve as the account number for the G-kala product offered by MoneyMaster is one of the product’s most notable features. We would like to express our gratitude to the CBN for providing us with the chance to broaden access to financial services in Nigeria by utilising our cutting-edge technology and extensive network “, came to the conclusion Globacom.

What Difference Will A Payment Service Bank License Make?

A Payment Service Bank (PSB) is a new category of bank with smaller scale operations and the absence of credit risk and foreign exchange operations. In addition to accounts (current and savings), PSBs can also offer payments and remittance services, issue debit and prepaid cards, deploy ATMs and other technology-enabled banking services. Think of them as basically stripped-down versions of traditional deposit money banks, with limited functionality and a focus on onboarding more of the excluded and marginalised population.

Under Nigerian central bank’s regulations, subsidiaries of mobile network operators (aka telcos), mobile money operators, retail chains (supermarkets) and banking agents are welcome to apply for the PSB license, provided they can meet certain requirements, including a 5 billion naira ($12million) capital base, and a combined 2.5 million naira ($6.4k) application and license fee (which are non-refundable).

The new banking licenses for Nigeria’s leading telcos are coming after the CBN issued an updated and revised guideline for the licensing and regulation of Payment Service Banks in Nigeria on August 27, 2020.

MTN has the largest chunk of the Nigerian telco market with over 74 million subscribers, followed by India’s Airtel with over 52 million users; locally owned Glo at 52 million; and then 9mobile with a meager 12 million users. Visaphone (which is merely an extension of MTN, having being acquired by the telecom giant in 2015 to boost its 4G capacity) comes last with just a little over 137, 000 users.

Glo bank Nigeria Glo bank Nigeria

Nigerian Telco 9Mobile Turns To Banking With The Country’s First Ever Payment Service License

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

How Kenya’s Data Commission Clamped Down On 40 Digital Lenders

After receiving over a thousand complaints, including one regarding a violation of data privacy, Kenya’s Office of the Data Protection Commissioner (ODPC) has announced that it intends to conduct audits of forty digital lenders in the country.

“The Data Protection (complaints handling and enforcement procedures) regulations, 2021, took effect on February 2022 paving the way for data subjects to file complaints and report data breaches to the Data Commissioner. As of 30th September 2022, ODPC had received 1,030 complaints. The office admitted 555 of these cases, including 299 which were on digital lenders, representing 54 percent of all cases admitted,” a statement from the commission reads.

The Central Bank of Kenya published a list of 10 digital lenders that were granted permission to operate late last month. Other service providers, the applications for which are still being reviewed, have been granted permission to continue business as usual; however, those service providers who did not submit an application will not be authorised to provide credit.

However, according to those who have filed complaints, some operators are still continuing to provide credit despite this.

“This is just one among many other complaints being investigated by the office. We want to assure the public that the complaints received will be investigated and concluded accordingly. All aggrieved members of the public are encouraged to continue sending their complaints,” Data Commissioner Immaculate Kassait said.

The Commission said in September that it had received 1,660 applications for Data Controllers and Processors who are required to register with the authority. These applicants must comply with the registration requirements.

Banks, corporations, and other types of organisations are examples of the kind of entities that are considered data controllers and processors because they deal with and process personal data. It guarantees that they are in possession of a licence that allows them to process personal data in accordance with the Data Protection Act of 2019.

Digital lenders Kenya Digital lenders Kenya

11 Startups Selected For 212 Founders New Accelerator Program

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

New Rules Now Require $9.5M To Obtain A Digital Insurance License In Ethiopia

September 24, 2022

General and long-term insurance firms in Ethiopia are now required to have a minimum paid-up capital of 500 million birr ($9.5M), an increase of 567 percent. According to the 2013 order, insurance firms needed a minimum of 75 million birr in paid up capital (60 million birr for general insurance and 15 million birr for long-term insurance).

Minimum paid up capital for general insurance would be 400 million birr and 100 million birr for long term (life) insurance company operation, as per the new order released on September 23 and effective from September 15, signed by Yinager Dessie, Governor of NBE. When compared to the 2013 mandate, the proportion for both has increased by 566.6 percentage points.

Current insurers have until June 30, 2027 to meet the minimum capital requirement, while new insurers will have until June 30, 2040 to do so.

Top Insurance Companies in Ethiopia for 2020/2019 budget year | AddisBiz.com — *Insurance companies in Ethiopia.*

Foreigners Are Still Not Allowed To Participate In Ethiopia ’s Financial Services Sector

Under new investment rules, banking, insurance, brokerage services, and legal consultancy remain off limits for foreign investors, according to the regulations published on the Ethiopian Investment Commission’s website.

Exports of coffee, and media and security services are also exclusively for local investors.

The updated regulations are part of economic reforms by the government of Prime Minister Abiy Ahmed and include the privatization of state-owned enterprises such as sugar and cement companies.

The country has also revealed plans to finalise the partial privatisation of its telecommunications sector by February 2021. This new development comes just three weeks after the Ethiopian Communications Authority (ECA) suspended the country’s telecom privatisation plans.

Several foreign banks have representative offices in the country, including Equity Group Holdings of Kenya. Lease companies, such as a unit of New York-based Africa Asset Finance Co., which pledged to bring in equipment worth $600 million after being licensed in August, can also operate there.

Insurance license Ethiopia Insurance license Ethiopia

Ethiopia’s Financial Services Sector Gradually Gives Way To Foreigners

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://insightsbyexpert

Foreign Investments In Algeria Must Now Be Registered With Algerian Investment Promotion Agency. Here’s What The New Law Provides

September 21, 2022

In order to be eligible for the benefits that come with making foreign investments in Algeria going forward, those investments will now be required to be registered with the Algerian Investment Promotion Agency.

A recently adopted piece of law known as “Presidential Decree No22–296” was responsible for giving birth to the Algerian Investment Promotion Agency specifically for this purpose.

According to the law, everything that is associated with the registration of foreign investments in Algeria (including the transfer of such investments) will be carried out through a one-stop shop that will be established by the Agency or via the digital platform of the investor by submitting an application in accordance with the prescribed forms.

The investor or the investor’s representative is required to register the investment themselves or have it registered on their behalf using a power of attorney drafted according to the prescribed forms.

In line with the stipulations of the legislation, the registration of start-up investments is contingent upon the presentation of a valid form of identification either by the investor himself or by his agent who has been appropriately delegated authority.

FOR THE FULL TEXT OF THE NEW LAW CLICK HERE.

Clickatell Partners the Central Bank of Nigeria to Increase eNaira Services

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://insightsbyexpert

Nigerian National Parliament Transmits Startup Bill To President For Assent

September 20, 2022

The Startup Bill was eventually delivered to President Muhammadu Buhari of Nigeria for his approval after it was passed by the Nigerian National Assembly.

According to a statement released by Senator Babajide Omoworare, who serves as the Senior Special Assistant to the President on Matters Relating to the National Assembly (Senate), the bill was subjected to all of the necessary parliamentary procedures before it was finally passed in the parliament.

It is important to remember that the Bill was sent to the National Assembly for consideration by President Buhari in a letter dated February 21, 2022, in accordance with Section 58(2) of the Constitution of 1999.

The Startup Bill, 2021 would make provisions for the establishment and growth of an environment that is conducive to the establishment of technology-enabled start-ups in Nigeria. It intends to establish Nigeria’s ecosystem as the top technological centre in Africa, having exceptional innovators with cutting-edge skills and exportable capability. This would be accomplished by positioning Nigeria as the leading economy in Africa.

A New $4M Digital Energy Fund Launched For African Startups. Here’s How It Will Work

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://insightsbyexpert

Egypt Launches “Pre-IPO” Fund To Support Companies Going Public

September 7, 2022

In an interview that aired on Bloomberg Television, Egypt’s Minister of Planning and Economic Development Hala El-Said disclosed that the country will be establishing a new “pre-IPO” fund to provide financial assistance to businesses as they work toward being publicly traded.

El-Said mentioned that the pre-IPO fund was established on Monday, and he said that its primary objective is to increase investment by purchasing public stakes in a variety of public institutions. Additionally, the fund will collaborate with strategic investors, such as sovereign wealth funds, in advance of public offerings.

El-Said, who is also Chair of Egypt’s Sovereign Wealth Fund, said that the government is now advocating a flexible exchange rate as part of its efforts to increase Egypt’s foreign exchange receipts by increasing exports, FDI, and remittances from abroad.

El-Said mentioned privatisation and a private sector-driven economy as priorities for Egypt during her interview.

Egypt had indicated that it was ready to resume its initial public offering programme, with the goal of listing roughly 10 government and military-owned enterprises on the Egyptian Exchange by year’s end. This plan was delayed owing to the conflict between Russia and Ukraine.

Early in the month of August, the Public Investment Fund of Saudi Arabia (PIF) established the Saudi Egyptian Investment Company (SEIC), whose primary mission would be to make investments in a variety of Egypt’s economic fields. Almost immediately after its inception, the SEIC bought minority holdings in four Egyptian firms with a combined value of over $1.3 billion.

Pre-IPO Fund Egypt Pre-IPO Fund Egypt

With Fawry’s Unicorn Status, Does Egypt’s Stock Exchange Hold The Unicorn Wand For Tech Startups In Egypt?

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://insightsbyexpert

At Last, Safaricom Goes Live In Ethiopia

August 29, 2022

Anwar Soussa, Chief Executive Officer, Safaricom Ethiopia

Safaricom and its partners (Vodacom Group, Sumitomo Corporation, and CDC Group, together referred to as the Global Partnership for Ethiopia (GPE)) obtained an operating licence for the lucrative Ethiopian market in July 2021.

It was revealed in July of this year that the operator will begin operations in August. This meant that services would be delivered four months late. Nonetheless, it was announced that telecom services will be delivered in stages, with broader coverage planned by 2023.

Dire Dawa was one of the first areas to be covered.

These events have now been confirmed by a statement from the telecom. It indicates that a significant client trial of Safaricom Ethiopia’s network in the mentioned city has already begun. This is a component of the previously described intermittent network launch, which will get the operator ready for a full-scale launch.

“We are excited to begin our customer pilot for Safaricom Ethiopia’s network and services in Dire Dawa. This is an important milestone we begin opening the network to customers in order to test the end-to-end readiness of technical and commercial operations ahead of full network launch. We thank the Government of Ethiopia, the Dire Dawa City Administration, the Ethiopian Communications Authority, community leaders, network, IT and distribution partners and all stakeholders for all their support towards realizing this and future milestones. We will continue to share updates, as we extend the network and customer pilot across other regions, towards our National Launch in October 2022,” said Anwar Soussa, Chief Executive Officer, Safaricom Ethiopia.

pic.twitter.com/JGwWqwhRFS
— Safaricom Ethiopia (@SafaricomET) August 29, 2022

Residents of Dire Dawa city may now use Safaricom Ethiopia’s 2G, 3G, and 4G coverage. Customers may also buy Safaricom SIM cards, and they can select the ideal phone number starting with the prefix 07 as well.

The SIM cards, which come with offers for broadband, phone, and SMS, will be sold at branded stores. They will be able to test the Safaricom network there for a month thanks to these deals, it should be noted.

Although airtime will be sold from branded stores, users will still be able to buy data, voice, and SMS units.

Safaricom Ethiopia has announced that three stores would be accessible to clients for SIM purchase and registration, customer care assistance, as well as the purchase of gadgets in Dire Dawa’s Kezira, Meskelegna, and Cornell regions.

Customers can use the network to contact friends and relatives who are using the privately held Ethio Telecom network. Calls to other countries are also feasible.

Their choice language will be supported for customer care, including Amharic, English, Afaan Oromo, and Ag-Somali.

By April 2023, Safaricom Ethiopia services will be accessible in 25 cities.

Kenya’s Transport Startup Shows Africa the Way with Electric Bus

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

Ethiopian National Security Body Orders Crypto Service Providers To Register Within Ten Days

August 28, 2022

Ethiopian national security agency, the Information Network Security Agency (INSA), has issued an urgent request for persons and companies offering crypto services to register with the agency.

The appeal invites anyone involved in mining and cryptocurrency transfer in Ethiopia to register within ten consecutive working days after the announcement date.

Here’s What You Need To Know

INSA stated that failure to register might result in legal penalties, citing its legal authority to control crypto usage in Ethiopia.

According to the urgent notification, INSA, which has the authority to control cryptographic goods and transactions, “accordingly, to appropriately regulate this area, INSA has begun to register persons and businesses that are participating in crypto operations (services), including transfer and or mining.”

This is the second time cryptocurrency use has created controversy in Ethiopia, following the National Bank of Ethiopia’s announcement in June 2022 that it would take “legal steps” against anybody discovered utilising cryptocurrencies for transactions in the nation. Since then, the bank has eased its stance on cryptocurrency, stating that Ethiopian laws may eventually incorporate cryptocurrencies.

The recent declaration by INSA throws the subject back into the spotlight. The security organisation directed crypto users to its website to learn more, fill out the required paperwork, and register.

On its website, INSA has included a new page dubbed “crypto register.” However, unlike the rest of the INSA site, the “crypto registration” page compels users to sign up only to view what the page looks like or read the advertised “additional information.”

Users must enter their full name, email address, and phone number to gain access. Despite reports that several people registered earlier today, the site is still unavailable.

Bank accounts, earnings, purchased land, information about mining machines, and willingness to be watched are some of the details necessary to register as a crypto service provider.

Ethiopian crypto register Ethiopian crypto register

Edo State Government of Nigeria Launches Agro Innovation Hub

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

India Finally Allows Local Venture Capital Firms To Invest Abroad. What Could This Mean For African Startups?

August 23, 2022

The Securities and Exchange Board of India has allowed Indian venture capital companies to participate in foreign enterprises for the first time in several years, opening doors to the possibility of more capital available to African startups. According to a set of rules issued by the board responsible for regulating securities and investments, venture capital firms with offices in India are now permitted to invest in the securities of companies with incorporations outside of India, subject to any conditions or rules that may be established or issued from time to time by the Reserve Bank of India and board.

As a result, the board’s previous requirement that the overseas investee company have a connection to India has been removed, enabling India-based VC firms to invest in any startup located anywhere in the world. However, the VC firm must only invest in an overseas investee company that is incorporated in a nation whose securities market regulator is a signatory to the International Organization of Securities Commission’s Multilateral Framework.

The new rules which apply to venture capital funds or other alternative investment funds shall come into force with immediate effect.

What Are The New Rules?

The following rules now apply:

The venture capital company or other alternative investment fund must submit a request for allocation of the foreign investment limit in the prescribed form to the board in order to be eligible.

The venture capital firm must not invest in an overseas investee company that is incorporated in a nation included in the Financial Action Task Force (FATF) public statement, such as nations with weak anti-money laundering or counterterrorism financing regulations.

If the VC firm previously liquidated investment in an overseas investee business, the sale proceeds received from such liquidation, to the amount of investment in the said overseas investee company, must be accessible for reinvestment by all VC firms (including the selling VC firm).

The VC firm shall transfer or sell its stake in an overseas investee company only to companies that are allowed to make overseas investments under the Indian Foreign Exchange Management Act, 1999.

Within three working days following the sale, the VC company must provide the board with the purchase information on the overseas investments in the format required in order to update the total amount of money that can be invested overseas by the VC firm.

All foreign investments sold or transferred by venture capital companies to date must also be reported to the board in the required manner within 30 days of the date of the release of the rules, by email to the board.

The VC firm’s Trustee, Board, or Designated Partners must make an undertaking to the board in the prescribed form on the intended foreign investment..

While making overseas investments, the VC firm shall not invest in joint ventures or wholly owned subsidiaries.

India venture African startups — **India’s outward foreign direct investment**. Source: Transnational Corporations Review

The Effects of the New Investment Regulations on African Startups

By implication, the new guidelines will probably result in more money flowing into African startups from India. It should be noted that the majority of African startups are incorporated in other jurisdictions (such as the US, the UK, most countries in the EU, as well as in South East Asia) that are considered compliant with the rules rolled out by Securities and Exchange Board of India, even though most locally registered African startups may not qualify for the receipt of the investments due to the rules relating to Anti-Money Laundering or Combating the Financing of Terrorism.

Until date, venture capital firms of Indian origin have actively invested through their international subsidiaries. Boleh Venture, which recently invested in Nigeria’s Norebase, has a Singapore affiliate, for example. Aavishkaar Capital, located in Mumbai, has just invested in Kenya’s Sky.garden. Other venture capital firms of Indian origin that have invested in African startups include: MyAsia VC (ImaliPay); Polygon Studios (Jambo); Old Fashion Research (Nestcoin); Pareto Capital (JABU); 100x Ventures (VALR); Horizen Ventures (WhereIsMyTransport); and Villgro Kenya, which was founded by India’s Villgro (Ilara Health; Turaco; Zuri Health).

In summary, it may be time for African startups to begin pitching to Indian venture capital firms, referencing the new guidelines.

Download the complete version of the new rules here.

India venture capital African startups India venture capital African startups

Ethiopia Is One Step Away From Licensing Foreign Fintechs As New Law Awaits Final Approval

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

Ethiopia Is One Step Away From Licensing Foreign Fintechs As New Law Awaits Final Approval

August 22, 2022

African-tech-startup-funding-rises-51-to-195M-in-2017

Foreign fintechs will be permitted to enter Ethiopia shortly, thanks to a recently tabled proclamation that revises a decade-old national payment system proclamation.

On Saturday, August 6, the Council of Ministers authorised a modification to the national payment system proclamation no 718/2011, which was initially published in 2011.

Here Is What You Need To Know

When the proclamation is passed by the parliament, it will open the door for foreign investors to participate in the country’s financial systems, at least temporarily, as payment operators.

So far, two businesses have entered the Ethiopian market as fintech operators: Ethio Telecom’s Telebirr and Kacha Digital Financial Services, which recently launched its operations.

According to Solomon Damtew, acting director of the National Bank of Ethiopia’s Payment and Settlement System Directorate, the NBE, a regulatory authority for the financial industry, is creating clear guidelines that would enable issuing a licence for the incoming businesses.

Even though it has only been around for a little over a year, the state-owned telecom carrier Ethio Telecom’s Telebirr has been able to convert more than half of its subscriber base to mobile money users. Additionally, the number of agents recruited by fintech or financial companies has increased by 800%, from 15,000 agents in the 2020/21 fiscal year to 156, 876 agents in just one year.

The majority of the new agents, in Solomon’s opinion, are Telebirr-aligned.
According to Solomon, the proclamation amendment required around three months of careful labour.

The proclamation states that national payment systems must include systems for payments, clearing, and settlement as well as for sending, receiving, and processing payment orders and money transfers in either domestic or foreign currencies.

Additionally, the proclamation states that payment service providers, including operators, participants, issuers of payment instruments, and any other entity acting as their agent or through outsourcing arrangements, may operate fully or partially in the nation.

Safaricom has indicated interest in participating in mobile money in the nation where the government has finally granted its request following its arrival as a first private and international investment in the telecommunications sector. As a result, it is anticipated that the Kenyan telecom company would be among the first international businesses to participate in fintech. The business is well-known for its ground-breaking M-Pesa mobile money service.

“Following the amendment of the proclamation, the ecosystem will be opened which means that highly experienced foreign companies will enter into the Ethiopian payment system,” Solomon added. “The move will uplift the success that we have so far achieved on the sector and will foster the use of a cashless economy in addition to ensuring financial inclusion besides strengthening the digital payment ecosystem.”
Read also Ethiopian Fintech Startup Chapa Launches Payment Gateway Service, Raising $6M For IDPs

Fintechs Licensing Ethiopia Fintechs Licensing Ethiopia

Foreigners Are Still Not Allowed To Participate In Ethiopia ’s Financial Services Sector Under New Rules

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