Ethiopian Authorities Approve Safaricom’s Launch of M-Pesa
The Kenyan mobile money service M-Pesa, launched in 2007, is expanding to Ethiopia. A company’s CEO Peter Ndegwa described Ethiopia as an opportunistic market where M-Pesa will be offered as soon as regulatory approval is granted.
NAIROBI, KENYA | NOW THEN DIGITAL — Mobile money service M-Pesa began in Kenya in 2007 and is now expanding into Ethiopia . According to Safaricom CEO Peter Ndegwa, Ethiopia is an opportunistic market where the company plans to offer M-Pesa as soon as regulatory approval is obtained.
- M-Pesa, which operates via SMS phone messaging and offers the capability of making deposits and sending and receiving payments, is expected to compete with state-owned Ethio Telecom service “Telebirr” which attracted up to 4 million users in just a few months after launching its mobile financial services last year.
- During an August interview with PYMNTS, Safaricom’s CEO Peter Ndegwa said the company sees Ethiopia as an opportunity for M-Pesa to be offered once it has received regulatory approval for it.
- The Safaricom license was acquired in July 2021, but it did not include mobile money services, partly because Ethiopian law prohibited foreign investors from operating in Ethiopia’s financial sector. As of April 2022, the NBE will amend financial laws to permit foreign investors to offer The Safaricom license was acquired in July 2021, but it did not include mobile money services, mobile money services to Ethiopians.
Ethiopia’s Finance minister Ahmed Shide announced that Safaricom Telecommunications Ethiopia (STE) had received approval to expand its mobile money services throughout the nation at the national launch in Addis Ababa.
Upon approval from the Central Bank, Safaricom will be able to obtain M-Pesa licenses and permits of operation. As part of the license, Safaricom will be able to provide mobile money services under its original name for fifteen (15) years, and will operate under the same name as the telecom giant.
The M-Pesa mobile financial service is expected to compete with Ethio Telecom’s Telebirr, which a few months after its launch a year ago attracted up to 4 million users to its mobile financial services. It operates via SMS phone messaging and offers the capability of making deposits and sending and receiving payments.
Ethiopian law prohibited foreign investors from operating in the Ethiopian financial sector, so Safaricom acquired Ethiopia’s first private telecom license in July 2021. Mobile money services were not included in the license.
The NBE announced in April 2022 a bill amending financial laws to allow foreign investors to offer mobile money services in Ethiopia.
Can you use M-Pesa in Ethiopia?
With Safaricom’s decision to offer mobile money services in the country, the government is making significant progress in its liberalization drive.
The launch of M-Pesa in Ethiopia will notably compete with Telebirr, which was launched by the incumbent operator Ethio Telecom in May 2021, and has attracted more than 21 million users in the interim.
The Ethiopian state-controlled company Ethiopia Telecom once held a monopoly, but now Ethiopia is liberalizing its telecom sector in order to pivot toward a modern, digital economy in accordance with Dr Abiy’s reforms.
With the reforms, international telecoms companies have been permitted to establish themselves in Ethiopia, including Kacha Digital Financial Services, which became the first private company in Ethiopia to receive a mobile money license from the National Bank of Ethiopia.
PYMNTS asked Safaricom’s CEO Peter Ndegwa about the new development in an August interview, and he said they see Ethiopia as an opportunistic market where they will offer M-Pesa upon regulatory approval.
“When that mobile money license comes, we believe we can create similar success in Ethiopia that we’ve seen in Kenya and the region. By so doing, we will democratise how financial inclusion is delivered and digitise the country in the context of enabling mobile internet,” Ndegwa said.
“When that mobile money license comes, we believe we can create similar success in Ethiopia that we’ve seen in Kenya and the region. By so doing, we will democratise how financial inclusion is delivered and digitise the country in the context of enabling mobile internet”.
Editor’s Note: Our content may be inaccurate or out-of-date, so please contact us at firstname.lastname@example.org if you see something that needs to be updated.
Originally published at https://nowthendigital.com on October 13, 2022.