NBE - Afrikan Heroes

M-PESA To Launch in Ethiopia, as Central Bank Amends Law

April 29, 2022

Marta Hailemariam, head of payment settlement at NBE

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.

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

European Bank for Reconstruction and Development and NBE Boosts Private Businesses in Egypt

June 22, 2020

With a loan of US$ 100 million in support of SMEs and private businesses in Egypt and an additional US$ 100 million aimed at increasing the current trade finance limit, the European Bank for Reconstruction and Development (EBRD) is supporting the Egyptian Economy with a US$ 200 million financing package through the National Bank of Egypt (NBE) for trade and for on-lending to local companies impacted by the coronavirus pandemic.Under this facility, the EBRD will provide a US$ 100 million loan to help NBE provide short-term loans to private small and medium-sized enterprises and firms facing liquidity strains due to a decrease in their activities and turnover caused by the crisis.

Jurgen Rigterink, EBRD First Vice President

In addition, the Bank is increasing an existing uncommitted trade finance limit for NBE by US$ 100 million under the EBRD’s Trade Facilitation Programme to reach US$ 300 million, to help meet the increased demand for import and export transactions. Jurgen Rigterink, EBRD First Vice President, said: “We are very happy to partner again with NBE to provide financing to local small businesses, the backbone of the economy. Strengthening this segment of the Egyptian economy has never been more important than during this crisis.”

Hisham Okasha, NBE Chairman, said: “NBE is committed to minimising the economic and financial impact of Covid-19 on the Egyptian economy and our customers in particular. This new facility, under the EBRD’s Solidarity Package, targets a crucial segment of the economy, which we will continue to support, thus ensuring its resilience. This facility comes on the heels of an increase of US$ 100 million in our trade finance programme with the EBRD as well as the signing of a package in the amount of US$ 150 million to support young people in business, skills in business and green climate financing.”

In response to the coronavirus pandemic the EBRD now expects to dedicate the entirety of its activities in 2020-21 to combating the economic impact of the crisis and stands ready to provide support worth up to €21 billion over this period in the 38 emerging economies where it invests. NBE is the largest commercial bank in Egypt. Since the cooperation with the EBRD began in 2013, credit and trade finance lines have been signed, including in support of women in business and to strengthen energy efficiency.Egypt is a founding member of the EBRD. Since the start of its operations there in 2012, the Bank has invested close to €6.5 billion in 115 projects in the country.

Kelechi Deca