ADDIS ABABA – The National Bank of Ethiopia announced it will allow locally-owned non-financial institutions to start offering mobile money services in a bid to boost non-cash payments in the country.
The move, reports say, effectively opens up the lucrative business to telecommunication companies including the state-owned monopoly Ethio Telecom.
The central bank directive – effective April 1 – comes amid plans to liberalize the telecommunications industry by offering two new licenses and selling a stake in Ethio Telecom.
Any foreign-owned companies, however, would remain locked out, according to the new regulations that were published on Wednesday.
Foreign telecom operators, including Kenya’s Safaricom and South Africa’s MTN, have expressed interest in bidding for telecoms licenses in Africa’s second most populous country.
But without further changes to the regulations, they will remain unable to offer mobile financial services business, analysts said.
“This directive effectively excludes foreign fin-tech and telecom companies from reaping the business benefits,” Bahakal Abate, a corporate lawyer in Addis Ababa, told Reuters.
License requirements include minimum capital of 50 million birr ($1.5 million), ownership by Ethiopian nationals or people of Ethiopian origin and a minimum of 10 shareholders, the National Bank of Ethiopia said in a statement on its website.
The directive allows maximum account balances of 30,000 birr and transaction limits of 8,000 birr daily and 60,000 birr monthly.
Companies that receive the mobile-money permits can also provide saving, credit, insurance and pension products. State-owned enterprises can also apply for permits, the central bank said.
Upgrading the Horn of Africa nation’s financial system is part of a raft of economic reforms by Prime Minister Abiy Ahmed’s government aimed at opening the economy to more foreign investment.