Ethiopia’s central bank, the National Bank of Ethiopia (NBE) has drafted a bill that will allow foreign investors to launch and operate mobile money services in the country, making way for companies like Safaricom, which is planning to begin operations in Ethiopia within the year.
This amendment of certain national payments laws is part of efforts to clear the way for Safaricom to launch M-PESA, Africa’s largest fintech platform, to the Horn of Africa country’s virtually untapped market of 110-million people.
Last year, a consortium led by Safaricom and Vodafone secured Ethiopia’s first-ever private mobile telephony license for $850-million, however, the deal did not include or permit mobile financial services like M-PESA.
M-PESA
The NBE now plans to amend this and remove the final remaining legal hurdle for Safaricom to launch M-PESA in the country through the new bill made public last week.
Included in the bill is the clause that “Foreign nationals may be allowed to invest in a payment instrument issuer or a payment system operator business, or establish a subsidiary which shall be licensed as a payment instrument issuer or payment system operator.”
“So far, there is no law that enables foreign operators like M-PESA to acquire a license in Ethiopia,” said Marta Hailemariam, head of payment settlement at NBE, said.
Hailemariam continues to say that if the new amendment is approved, it will “allow M-Pesa to get a license in Ethiopia.”
Safaricom launching M-PESA in Ethiopia would be a major coup for the Kenyan telecom. The firm is particularly attracted by the growth potential Ethiopia’s massive population offers, the second-largest in Africa behind Nigeria. The country’s 114.1-million people currently only have a mobile phone penetration rate of 51.4 percent.
The people of Ethiopia are also ravenous for mobile financial services. State-owned Ethio Telecom launched its own mobile fintech service called Telebirr last year, which attracted four million users within a few weeks. Safaricom’s M-PESA is, by the sheer size of its user base (over 50-million), the most popular mobile finance platform on the continent.
Now, with both the Ethiopian government making way for Safaricom and the Ethiopian people ready and willing to embrace mobile finance, Safaricom may just get its cake and eat it too.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Safaricom, Kenya’s biggest telecoms firm, is about to turn in a game-changer. Following the announcement that efforts to obtain an insurance license are on track, and the recent debut of the video-streaming app Baze, the teleco now appears to be out to dominate the Kenyan market across the board. The M-Pesa Super app, which will be released today, will provide a new method to interact with money. The M-Pesa Super App and its mini-applications will be covered by the new app. Customers and companies utilizing Lipa Na M-Pesa may use the mini-apps to buy, connect with suppliers, and execute hundreds of functions without having to leave the M-Pesa super app.
Safaricom CEO Peter Ndegwa
All M-Pesa users will be able to use the app across all of the company’s markets, including Tanzania, Mozambique, the Democratic Republic of the Congo, Lesotho, Ghana, Egypt, Afghanistan, and South Africa.
This launch marks a new stage for the M-Pesa brand since its creation in March 2007. This innovative payment service for unbanked populations has revolutionized mobile money in Africa and around the world. Its enormous success has led Safaricom to make it a full-fledged business unit.
Exploiting M-Pesa’s Growing Customer Base To The Fullest
Recently, Safaricom said it had been testing three new products dubbed Bima (Insurance), Mali (mobile savings) and a unit trust investment product, and had initiated moves to secure regulatory approval in that regard.
CEO Peter Ndegwa says the telco wants to tap into M-Pesa’s 26.7 million active customers that transact about Sh1.5 trillion a month to grow the savings, unit trust and insurance products.
Mali (Kiswahili for wealth), will offer interest rates of 10 percent on deposits capped at Sh70,000 per saver based on a pilot test. It started testing the savings product in December.
Safaricom growth strategy hinges on widening M-Pesa offerings and bolster its data business through switching about four million 2G and 3G phones to 4G to offset a fall in revenue from mobile calls amid a saturated market.
Mr Ndegwa says the telco wants to use the new products as part of the strategy to broaden M-Pesa into a financial service provider that will rival banks, insurance firms and fund managers.
In November this year, Senators in Kenya expressed worries over the growing strength of the country’s leading telecoms firm, Safaricom, warning that it is too big for the competition and giving the impression that there is no level playing ground in the country’s telecoms industry.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions. He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance. He is also an award-winning write
Leading telecoms operator Vodacom Group of South Africa is considering selling part of its stake in mobile money platform M-Pesa to unlock value running into billions of shillings from the fast-growing service. Responding to a question from an analyst who asked if the company is likely to spin off M-Pesa and whether the multinational is willing to sell a stake to external parties, the Telcos chief executive Shameel Joosub said that nothing is off the table.
Vodacom chief executive Shameel Joosub
M-Pesa is currently offered by Vodacom majority-owned subsidiaries in Tanzania, Mozambique, Lesotho and Democratic Republic of the Congo (DRC). Vodacom also owns an indirect stake in M-Pesa’s business in Kenya through its 35 percent stake in Safaricom .
Mr Joosub said the company will consider selling part of its stake in M-Pesa if investors continue to ignore the value of the platform.
“To be honest, we would like the market to give us more credit for our financial services assets and we are not in a position yet where we think the time is optimal to sell or even monetise a portion of the assets because we believe there is still a lot of growth left in M-Pesa,” Mr Joosub said.
“But [it is] certainly something that is in consideration. We have structurally set up in the different markets M-Pesa and financial services into separate entities. So it does give us optionality going forward,” he added in reference to the sale of M-Pesa.
Vodacom Group did not give timelines on the potential sale of the mobile money service, signalling it will hold on to M-Pesa in the short term. Mr Joosub said that should a decision be made to sell part of M-Pesa, the structure of such a sale will have to be defined.
The options include selling a stake in the platform in specific countries or in M-Pesa Global Services – the new joint venture it runs with Safaricom on a 50/50 basis and which aims to take the service international.
The plans to unlock value from M-Pesa comes after rival Airtel Africa signed deals to sell minority stakes in its continental financial service for huge sums through its subsidiary Airtel Mobile Commerce BV.
“In line with our strategy of unlocking value in our mobile money business, we will soon welcome two new minority investors (The Rise Fund and Mastercard) in agreed transactions which value this part of our business at $2.65 billion (Sh286 billion), as well as bringing $300 million (Sh32.3 billion) into the group,” the multinational said when releasing its annual results last week.
Vodafone Plc, the parent company of Vodacom, signalled that M-Pesa could fetch greater sums should a partial sale of the mobile money platform be implemented.
“We are a clear number one in the African market. We have a base of mobile money of over 60 million in active customers. So we are about three times the size of Airtel,” Vodafone’s chief executive Nick Read said on Tuesday in response to an analyst who asked if the multinational will make similar deals like Airtel.
Vodacom’s financial services, including Kenya, had 57.7 million customers and its total revenue stood at R19.3 billion (Sh148 billion) in the review period, representing a six percent increase from R18.2 billion (Sh139.4 billion) a year earlier.
This was despite the loss of R2 billion (Sh15.3 billion) from zero-rating of certain person-to-person cash transfers in most of the markets including Kenya where free transactions lasted between March and December for values of Sh1,000 and below.
Mr Joosub said the telco would prefer that the market recognise the value of the mobile money platform, adding that if not, Vodacom will consider to “at least monetise a portion of these assets going forward.”
Vodacom has a market capitalisation of about Sh1.8 trillion, slightly ahead of Safaricom’s Sh1.5 trillion despite being a much larger firm by revenues and earnings among other measures.
The entry of Mastercard and Rise Fund into Airtel Money’s business indicates investor enthusiasm for Africa’s lucrative and fast-growing financial technology platforms.
Airtel Money generated revenues of $227 million (Sh24.5 billion) from 14 markets including Kenya and Uganda in the year ended March, a 44.5 percent jump from $157 million (Sh16.9 billion) the year before.
This was despite removal of charges on certain transactions in several countries last year as governments worked with telcos and banks to offer financial relief to customers and reduce use of physical cash in the course of the Covid-19 pandemic.
Both Airtel and Vodacom plan to invest heavily in their mobile money platforms which are set to replace the traditional voice business as the growth and profit drivers.
“These are less capital-intensive businesses compared to core mobile so that you gives you a better return on capital profile,” Mr Joosub said.
Airtel says the low uptake of traditional banking services continues to be the main driver of demand for mobile money services.
Airtel Money offers mobile wallet deposit and withdrawals, merchant and commercial payments, benefits transfers, loans and savings, virtual credit card and international money transfers.
The multinational has sought to expand the subscriber base and use of its mobile money platform through partnerships with multiple financial services firms.
It has, for instance, signed agreements with cash remittance companies MoneyGram, Mukuru and WorldRemit.
The telecoms operator also plans to introduce new banking and remittances services in partnership with London-based lender Standard Chartered Plc which has subsidiaries operating in 16 African markets.
Vodacom has similar plans to expand its financial services and has partnered with Alipay, a Chinese mobile and online payment platform that has more than one billion users, to create a new “super-app.”
“Our super-app will offer services ranging from loans and savings, seamless QR and person-to-person payments, to entertainment and personalised shopping experiences, promoting greater financial inclusion,” Mr Joosub said.
“We see this super-app as a precursor to M-Pesa’s evolution, supporting accelerated growth across our financial services’ businesses and assisting us in connecting the next 100 million African customers so that no one is left behind.”
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Africa’s largest mobile money provider Safaricom is in talks with the world’s biggest retail outlet Amazon, over the use of its mobile money service M-Pesa on Amazon’s eCommerce platform. This move is said to be part of the Kenyan telco’s efforts to recover from a year of disappointing profits.
CAK Director-General, Francis Wang’ombe Kariuki
“M-Pesa accounts for about a third of Safaricom’s revenue, and East Africa’s largest company sees the financial-technology product as the key to future growth. The carrier already has partnerships with a unit of China’s Alibaba Group Holdings Ltd. and PayPal Holdings Inc.”
According to PYMNTS, this isn’t the first time these two giants have partnered, “as the two already partner on web services, and the Kenyan company runs cloud sales for Amazon”.
Calls for Safaricom to Share Telco Infrastructure by Kenya Competition Authority
The Competition Authority of Kenya (CAK) has approached Parliament with new laws that would require the country’s telco’s – mainly Safaricom – to share their private infrastructure on a commercial basis.
“The authority’s view is that ab initio infrastructure provisions in the sector should have been separated from the mobile network operators. Primarily regulations should have been developed to ensure that third parties provide the infrastructure. Unfortunately, this did not happen,” says CAK Director-General, Francis Wang’ombe Kariuki.
“It is with this reality that we opine regulations should be promulgated and enforced in regard to infrastructure sharing on a commercial basis and in case of dispute, the sector regulator [Communications Authority of Kenya] may act as the arbiter.”
Sources say that Safaricom has the broadest national coverage, was the first to launch the cutting-edge 5G technology and has been spending more than Sh30 billion each year on its infrastructure – more than any of its competitors.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Africa’s leading mobile money provider M-PESA has introduced a new M-PESA app feature that allows users to send money to up to five people at the same time. According to Safaricom, owners of M-PESA, the key reason why it introduced this feature is to make it easier for companies to pay employees via the app.
“Most times you’d have to send them their dues one by one which can be tedious. Now this update should help ease that pressure. We’re not sure yet if it lets you select different amounts for different people but if that’s the case it’s even better.”
MTN Group has reportedly made a bid for an Ethiopian telecommunications licence alongside Vodacom Group and Safaricom. Finance ministry adviser, Brook Taye says that the consortium of bids is led by Safaricom.
“We always wanted quality providers and this is what we have received,” adds Taye. “These are two African giants — the Safaricom-led consortium and MTN — either one or two of the operators will get a licence in Ethiopia.”
Kenya’s geographical proximity to Ethiopia is expected to be one reason why Safaricom leads the consortium.
The CEO of Safaricom, Peter Ndegwa, said that he would continue to pursue ways to introduce the company’s data, M-PESA and geographical expansion to Ethiopia as part of his strategy to take Africa-wide telecom to the next level of growth.
Taye revealed that Ethiopia will take a few days to review the technical offer and then open the financial bids. The government is looking to award two full-service telecoms licences as part of its plan to attract more foreign investment to its economy.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
The world’s largest mobile money platform, Safaricom’s M-Pesa Africa has appointed Sitoyo Lopokoiyit as its new Managing Director. He is a “mobile financial services expert who has directly managed mobile money in two of the largest markets in the world – Kenya and Tanzania,” reveals MyBroadBand. Lopokoiyit joined Safaricom in 2011 as head of M-Pesa strategy and business development. He then went on to Vodacom Tanzania in 2016 where he worked as the director of m-commerce, before re-joining Safaricom in 2018.
Sitoyo Lopokoiyit
It could be recalled that Kenyan Senators have been working towards breaking up Safaricom so M-PESA can be a separate entity to prevent what they call undue monopoly. They believe that Safaricom should split into two firms – Mobile Services and M-PESA. According to The Star, a split would see the mobile telephony service regulated by the Communication Authority of Kenya (CAK) and the M-Pesa division regulated by the Central Bank of Kenya (CBK).
A recent report by TechWeez revealed that senators believe there should be a level playing ground for the likes of Telkom and Airtel Kenya who operate at the mercy of Safaricom as they owe it billions of shillings.
“The market is not competitive any more. The other operators should be allowed to operate, by giving the dominant operator its right, but also allowing the others to operate, and allow innovation in the country,” says Senator Petronilla Were of the ICT committee.
Senator Irungu Kang’ata echoed this sentiment, saying “in Kenya, you have a situation where one single player dictates how much you are going to pay for data bundles, for calls and Short Message Service because it controls almost 90 per cent of the market”.
“In such a situation, I do not foresee any other entity growing. We are not going to create more jobs and innovation in that industry because of the dominance of one entity.”
Senator Enock Wambua urged Safaricom to confirm whether it is a communication company or a banking institution. “I would suggest that Safaricom is split into two. Safaricom the communication company, regulated by the Communication Authority of Kenya (CAK), and the M-Pesa division regulated by the Central Bank of Kenya.”
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Ethiopia has said that there was no government directive aimed at shutting the door on East Africa’s largest mobile money firm, M-Pesa. This was in reaction to media claims that the country has shut out the operations of M-Pesa in Ethiopia. This was made known by the digital transformation adviser to the Ethiopian Prime Minister Myriam Said.
Digital transformation adviser to the Ethiopian Prime Minister Myriam Said
Ms. Said has been at the helm of an Ethiopian fintech start-up for eight years before she became director of the Digital Transformation Program at the Ministry of Innovation and Technology for nine months before joining the Office of the Prime Minister last February.
She currently advises the office on strategic matters related to digital technology, ranging from liberalising the telecoms sector to drawing up a start-up act, not to mention fostering openness to foreign investment. In Ethiopia, only 24% of the population has internet access, making it one of the least connected countries on the continent.
Speaking on the digital divide in the country, Said said that the country lacks telecommunications infrastructure, especially towers [there are 8,000 today, but about 10 times that number are needed] to connect rural areas to the internet. “This is one of the reasons why the government decided to liberalise the telecoms sector and privatise a portion of Ethio Telecom, two processes that are currently under way.
We’re behind, but that shouldn’t obscure the fact that we’ve accomplished a significant amount of work this past decade. Our main achievement was the installation of 35,000 kilometres of fibre optic cables, which means our country has a solid infrastructure backbone. To date, between 80% and 85% of Ethiopia’s major cities are connected to the fibre optic network.
On the two licences for telecommunications operators that were originally set to be issued in March 2020, she said that the postponement is for purely administrative reasons. The Ethiopian Communications Authority [ECA] according to her is still in its infancy and we need to strengthen its skill set by continuing to hire more professionals and by developing various regulatory frameworks. At this time, the ECA is working, for instance, on developing a universal telecommunications service.
It could be recalled that in April, while the Kenyan telecoms giant Safaricom was in talks with the Ethiopian authorities to launch its M-Pesa app, the country’s central bank, the National Bank of Ethiopia was against the proposed launch insisting that it can only allow locally-owned non-financial institutions to offer mobile money services. This according to Said is because unlike Kenya, where the telecoms sector has influence, Ethiopia is a country in which banks have clout. Ethio Telecom can’t, for example, launch its own mobile banking service. It has to create a joint venture with a banking institution and form a company specific to that project. “So, we didn’t shut the door to M-Pesa. Instead, we’ve asked them to partner with an Ethiopian bank.
She equally pointed out that the country is drawing up a law that facilitates the growth of digital start-ups. And as part of that process, the draft law establishes three main measures. The first concerns tax exemptions for businesses and all other players, such as incubators, taking part in the growth of the digital economy.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Efforts by M-Pesa to ensure that Tanzanians can receive money from all over the world got a boost over the weekend as Vodacom raised the bar with a new product which affords customers the option and ability to easily transfer and receive funds from individuals across more than 200 countries worldwide. Vodacom says with the expansion of its International Money Transfer service portfolio customers from over 200 countries can send and receive money via Vodacom’s Tanzania M-Pesa; The mobile Money services which has continued to drive economic growth and financial inclusion in Africa.
Vodacom Tanzania PLC Managing Director Mr. Hisham Hendi
This was made known at an international day of family remittances event held in Dar es Salaam where stakeholders met to deliberate on the future of International Remittance post COVID 19. Speaking during a panel discussion on the same, Assistant Manager, Oversight and Policy at Directorate of National Payment Systems from Bank of Tanzania (BOT) Albert Cezari said the national bank has increased limits on digital transactions and reviewed balances of mobile wallets in a bid to provide relief and ensure continuity of services as part of measures taken amidst COVID-19.
On his part, Vodacom Tanzania PLC Managing Director Mr. Hisham Hendi, said that international remittances make possible people and small businesses to stay connected irrespective of geography. He further pointed out that international remittances continue to transform the lives of thousands of Tanzanians through facilitating payments in education, health, and various business segments which is why Vodacom M-Pesa has aimed to continue providing a platform for Tanzanian diaspora to effectively participate in socio-economic activities which will contribute to the overall development of the country.
“We pride ourselves for being enablers in the payment system by facilitating cross border trade within the region for the efficient and seamless sending and receiving of funds, from anywhere around the globe through M-Pesa International Money Transfer Service.’ He said. odacom M-Pesa has broadened its portfolio of partnerships and countries over the past few months to widen its Money transfer service worldwide. At the global stage, partners include MoneyGram, WorldRemit, Remitly and JubaExpress, all of whom enable customers to receive money from over 200 countries across the World directly into their M-Pesa wallet. Pan African partnerships include Safaricom, MTN, EcoCash and Mama Money, which enable customers to send or receive money from Kenya, Uganda, Zambia, Burundi and South Africa.
“With such a huge portfolio of international Money transfer partners, the world is a village with M-Pesa. We thank our customers for their patronage and we remain committed to deliver on our vision to lead Tanzania into the digital age and change lives through technology” He concluded.
Peter De Caluwe, CEO- Thunes praised the move saying such partnerships and innovations support the true African spirit because African countries have always been connected through daily movement of people, goods and services. International Money Transfer services are critical to the African economies as they facilitate inflow of foreign currency into these countries which has a direct bearing on the social and economic welfare of Africans”.
“Whilst the importance of mobile payments to financial inclusion in developing markets cannot be overstressed, the M-Pesa IMT service goes an extra mile by allowing previously excluded to send and receive money across borders affordably. Thus our partnership with Vodacom M-Pesa aims at increasing the reach of international money transfers’.
Vodacom M-Pesa is Tanzania’s largest mobile financial service introduced by Vodacom Tanzania PLC in 2008. Now GSMA certified and with over 10 million customers, M-Pesa has significantly contributed towards financial inclusion and economic activity in the country. Customers deposit and withdraw money from their M-Pesa wallets through over 200,000 agents across the country. The M-Pesa ecosystem connects businesses, banks and government agencies making digital payments possible. To date, M-Pesa continues to be the market leader in mobile financial services, rolling out innovative services such as savings & Loans, Virtual Debit cards, Overdraft services, Group savings, E-payments and many more, which address the real needs of Tanzanian thereby enhancing financial inclusion and deepening. According to World Bank Figures, Tanzania recent remittances stood at $430 million, an increase of $25 million from 2019. The sum represents 0.8 percent of the country’s GDP.
Vodacom Tanzania Plc is Tanzania’s leading mobile operator and mobile financial services provider. We provide a wide range of communication services for consumers and enterprise – including voice, data and messaging, video, cloud and hosting, mobile solutions and financial services – to over 15 million customers. Vodacom Tanzania Plc and its subsidiary companies are part of the Vodacom Group registered in South Africa, which is in turn, owned by Vodacom Group Plc of the United Kingdom. It has been registered on the Dar es Salaam Stock Exchange (DSE) with stock name: VODA.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
There are indications that Safaricom may not be able to unveil its groundbreaking mobile money transfer M-Pesa to east Africa’s biggest economy, Ethiopia because of recent developments leading to Ethiopia’s refusal to allow foreign mobile phone companies like Safaricom to open mobile money transfer shop in the country. This means that Saraficom’s hopes of introducing its popular M-Pesa mobile money transfer platform in the market of 100 million people is dashed. Ethiopia said that such service is too strategic to be left in the hands of a foreign company, that only local companies would be allowed to do offer such services.
Safaricom had launched talks with the Ethiopian government to launch the mobile money service in the country but Thursday, Ethiopia’s central bank said it would only allow locally-owned non-financial institutions to offer mobile money services as it seeks to boost non-cash payments. The new directive means that only companies like Ethio Telecom, which is a government-owned monopoly, have the green light to move into mobile money services. It also means foreign companies have effectively been locked out. As such, for a company like Safaricom to offer the service in Ethiopia, it will need to go into partnership with Ethio Telecom, which is in line to be privatized through the sale of a minority stake.
Safaricom, in partnership with its parent company Vodacom, and a number of other global telecom firms such as MTN, Orange, Etisalat, and Airtel, have all expressed interest in gaining access to Ethiopia’s fast-growing mobile phone services market. Without further changes to the regulations, Safaricom will remain unable to offer mobile financial services business in the customer-rich market, analysts said. “This directive effectively excludes foreign fintech and telecom companies from reaping the business benefits,” Bahakal Abate, a corporate lawyer in Addis Ababa, was quoted as saying.
Besides telecommunications, the Ethiopian government last year announced plans to open up the aviation sector, the State logistics firm and electricity monopoly to private investment. The telecommunications monopoly, Ethio Telecom, is seen as the biggest prize due to its huge protected market. Ethio Telecom’s subscriber base of 44 million makes it the biggest single-country customer base of any operator in Africa. Players like Safaricom are attracted by the growth potential in that market, whose 100 million population means the country a penetration rate of 44 percent. By contrast, Kenya’s 52.2 million mobile phone subscribers gives it a penetration of 109.2 percent.
M-Pesa has the potential to transform Ethiopia’s economy, as it has done in Kenya, by allowing people to sidestep a rickety and inefficient banking system and send each other money or make payments at the touch of a phone button. The ability to access digital banking services is likely to be a game-changer for Ethiopians whose banking sector has no way of transferring funds from one bank to another.
Safaricom is one of several Kenyan firms that have been eyeing the Ethiopian market for years due to the country’s huge population. Ethiopia has kept foreign involvement in the economy at a bare minimum. The country has consistently registered robust economic growth, averaging 10 percent in the past five years, and its ongoing economic reforms look set to strengthen investor sentiment. Its population, which is the second-largest in Africa after Nigeria, also offers immense opportunities for business.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
In what analysts have described as a first in the world, Africa’s leading mobile money transfers network M-Pesa has concluded a partnership agreement with WorldRemit to enable over nine million customers to receive money directly to their M-Pesa wallets from friends and family living abroad. This partnership which is powered by Vodacom Tanzania increases convenience for money transfer recipients in urban and rural areas of Tanzania as they can receive international money transfers directly to their phones, without the need for a bank account or internet connection.
Vodacom Tanzania M-Pesa Director Epimack Mbeteni
Using the WorldRemit app, Tanzanians living abroad in over 50 countries, including the US, UK and Canada, can send money home 24/7 in just a few taps. This saves customers time and money as they do not have to travel to a traditional money transfer agent and pay expensive fees to send money home in cash. WorldRemit is a global leader in international transfers to mobile money accounts and is connected to over 190 million accounts across 30 countries.
Speaking on this development,Vodacom Tanzania M-Pesa Director Epimack Mbeteni, said that “this new partnership with WorldRemit enables us to tap into their global payments network, and help customers receive remittances into Tanzania from more countries around the world”. He added that it will enable families and friends in the country to conveniently receive money through M-Pesa from across the world. “This is just one more way we are making our customers’ lives easier”, he quipped.
Describing the process, he noted that once the money is in their M-Pesa accounts, recipients can use it for development and other economic activities such as savings and loans, overdraft services, group savings, e-payments and many more services offered by Vodacom. “We have an extensive footprint of over 106,000 M-Pesa agents across the country, as well as a diverse ecosystem of banks, businesses and merchants connected to M-Pesa.”
Cynthia Ponera, Country Manager for Tanzania at WorldRemit, said: “Our money transfer service to Tanzania is growing by over 100% year-over-year, and mobile money is the most popular way for our customers to send money to the country. She pointed out that WorldRemit is delighted to partner with Vodacom to further expand its network and connect over nine million M-Pesa customers to the award-winning money transfer service. “Our partnership will drive down the cost of sending money to Tanzania and enable recipients in some of the most remote locations to receive money from abroad in seconds”, she added.
According to the World Bank, migrants from Sub-Saharan Africa sent $46 billion back home in 2018, a growth of 10% compared to the previous year. Money sent back to families contributes to the sustainable growth of Tanzania’s economy, and is used for family essentials, such as healthcare, education and bills, as well as savings, investments and business ventures. The majority of money transfers to Tanzania are sent through banks, which often charge high fees and can take several days to process payments.
As WorldRemit does not have to pay charges associated with agent locations in sending countries, the company can pass these savings on to customers. According to the World Bank, the average cost of sending £120 ( $155) from the UK to Tanzania is almost 9.5%. WorldRemit fees for the same amount start below 2%. The company is also currently offering customers zero fees on their first three transfers if they use the code 3FREE when making payment.
In addition to its mobile money service, the company also offers bank transfer, cash pickup and mobile airtime top-up to Tanzania.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
