Ethiopia points cell cash switch licence to Kenya’s Safaricom

The Central Financial institution of Ethiopia on Thursday granted Kenyan telecoms operator Safaricom the primary cell cash switch licence to a overseas operator within the nation’s one hundred pc Ethiopian banking sector, the establishment and the corporate introduced.

Safaricom Ethiopia has been awarded the second cell phone licence in Ethiopia in 2021, alongside the incumbent and 100% state-owned operator Ethio Telecom. The operator has been step by step rolling out its community since 2022 in Africa’s second most populous nation (120 million inhabitants).

In a press launch, the Nationwide Financial institution of Ethiopia (NBE) introduced that it had “right this moment issued the cell cash switch providers licence to Safaricom M-Pesa Cell Monetary Service Plc”.

The latter is a newly created subsidiary of Safaricom Ethiopia, a consortium led by Safaricom and together with South African operator Vodacom and the Japanese group Sumimoto.

“That is the primary cell cash switch licence granted to a overseas investor in Ethiopia,” the NBE added.

On the launch of its providers in Addis Ababa in October, Safaricom Ethiopia introduced that it had reached an settlement with the Ethiopian authorities to acquire the cell cash licence.

“Earlier than issuing the licence, the NBE amended the nationwide Fee Programs laws to ascertain the required regulatory framework for overseas telecom operators to offer Cell Monetary Providers (MFS) in Ethiopia,” Safaricom Ethiopia stated in an announcement.

Safaricom Ethiopia added that it plans to launch its cell monetary providers within the second half of 2023.

Safaricom’s M-Pesa service, which is extensively utilized in Kenya particularly, permits customers to ship and obtain cash, pay payments, or make purchases, even with no checking account.

Safaricom claims that it’s utilized by 51 million folks in seven African international locations. In its newest monetary report, Safaricom estimates that M-Pesa contributes virtually 40% of its income.

Ethio Telecom provides a cell cash switch service in Ethiopia referred to as Telebirr, named after the Ethiopian nationwide foreign money, the birr.

“We strongly assist the unfold of digital fee methods as an alternative to money transactions,” says the NBE, as Ethiopia introduced final 12 months its intention to open its banking sector to overseas gamers.

When he got here to energy in 2018, Ethiopian Prime Minister Abiy Ahmed introduced an enormous sequence of reforms to modernize the financial system, which remains to be extremely state-run and never very open to overseas funding.

However the nation’s financial system has deteriorated sharply in recent times and the drive for reform has stalled.