M-Pesa, the Kenyan mobile money service success story that began in 2007, is continuing its expansion, this time into Ethiopia.
At the national launch of Safaricom Telecommunications Ethiopia (STE) in the capital Addis Ababa yesterday, Ethiopia’s Finance minister Ahmed Shide disclosed that the mobile money platform had received approval to roll out its services across the country.
The Finance minister noted that Safaricom would be allowed to acquire permits of operation and license for M-Pesa services from the Central Bank following the approval. The license permits the telecom giant to operate in the country for fifteen (15) years. Safaricom will also operate under its original name in offering mobile money services.
M-Pesa, which operates via SMS phone messaging and offers the ability to make deposits and send and receive payments, is expected to compete with state-owned Ethio Telecom service “Telebirr”, which attracted up to 4 million users in a short period after it launched its mobile financial services last year.
The latest news that Safaricom will be offering mobile money services in the country is a significant milestone for the government’s liberalisation agenda.
Ethio Telecom has enjoyed a monopoly, but Ethiopia has since moved to liberalise the telecoms sector to pivot to a modern, digital economy in line with reforms unveiled by Dr Abiy in 2018, Business Daily reported.
As part of the reforms, international telecoms businesses have been allowed to set up shop in Ethiopia, including Kacha Digital Financial Services, which became the first private company in the East African nation to be awarded a mobile money license by the National Bank of Ethiopia.
Safaricom’s CEO Peter Ndegwa told PYMNTS in an interview in August that they see Ethiopia as an opportunistic market where the company plans to offer the M-Pesa service once regulatory approval is received.
“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.
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