The National Bank of Ethiopia (NBE) has taken a major step in increasing financial inclusion in the country by granting a mobile money service license to Safaricom M-Pesa Mobile Financial Service on 11th May 2021. The license enabled Safaricom, the Kenyan telecom, to break through the monopoly of state-owned Ethio Telecom. Since Safaricom, which operates through its subsidiary Safaricom Telecommunications Ethiopia, entered in October 2020, it has amassed almost 3 million users.
This decision comes as part of the NBE introducing legislation into the Parliamentary Assembly in early 2022 to permit private service. The issuance of license to Safaricom could potentially bring competition to Ethio Telecom, which currently has 54 million users out of the population of 118 million. The government is also looking for opportunities to sell 45% of its shares in Ethio Telecom.
In addition to license payment, Safaricom has also planned to launch its M-Pesa services in the second half of the year. M-Pesa operates as a mobile financial service that provides access to finance to anyone with a mobile phone, regardless of whether they possess a bank account or not. The service is already operating in 9 African countries, along with Afghanistan.
The move towards digitalization and financial inclusion in Ethiopia is also reflected in other blockchain-based services. Fuse, a blockchain-based payments platform, has unveiled its plans to launch ChromePay’s decentralized identity services in the region. Moreover, the Cardano blockchain has invested heavily in the infrastructure, while Project Mano is campaigning for the adoption of Bitcoin (BTC).
All this shows a promising shift towards greater financial inclusion within Ethiopia. The economic development of the country relies heavily on digital services, and NBE's decision to issue a license to Safaricom will assist in allowing people access to digital services. With more organizations like Fuse, Cardano and Project Mano joining forces, this trend can only continue to increase.
Lincoln James
- 2023-05-11
Ethiopia Sees Promising Shift Towards Increased Financial Inclusion
The National Bank of Ethiopia (NBE) has granted a mobile money service license to Safaricom, Kenya's telecom giant, to break through the monopoly of the state-owned Ethio Telecom. This move is part of Ethiopia's push for financial inclusion and digitalization in the region.
