ADDIS ABABA – Ethio Telecom has launched a Telebirr-based Digital Financial service, aiming to serve the unbanked and financially underserved segment of society.
The company launched the digital financial services a few days after acquiring a permit from the National Bank of Ethiopia (NBE).
The company has partnered with Dashen Bank, one of the top private banks in Ethiopia, to start providing the digital financial services in the country.
Due to goal alignment with Dashen bank, officials of the telco said the two companies entered into an agreement to provide “easy and convenient digital financial services to the financially underserved and unserved segment of the society using modern technologies.”
– New Digital Services –
The services involve three types of financial products namely Telebirr Mela (microcredit), Endekise (credit pay/overdraft service), and Telebirr Sanduq (Micro Saving service).
Mela financial service allows individual customers, agents, and merchants to borrow money for any transaction or withdrawal while Telebirr Endekise enables customers to borrow money when they are short of balance in their Telebirr accounts while making a transaction.
The third, Telebirr Sanduq, is a savings service that provides interest-free and interest rate-based micro-saving services.
“Telebirr digital financial services is unique in availing both micro loan and overdraft services without the need for collaterals,” said the company.
“Creditworthiness of the customer and the amount of credit is determined by an Artificial Intelligence or AI-enabled credit scoring system which takes into account the telecom usage and Telebirr transactions made by the customer,” it added.
The services can be accessed via Telebirr App and USSD (*127#).
– Targets Unique customers –
The government-owned telecom has recently been broadening its business horizon with a focus on digital finance. Telebirr, a Mobile Money business platform, has become an integral part of the process, said Ethio Telecom, with the platform providing financial services to low-income and rural people who do not have access to banking services.
Since its launch on May 11, 2021, Telebirr has acquired 22 Million subscribers, with its total transaction value reaching over 32 billion birr. Nearly a million USD has also been remitted via the platform after its recent integration with international money transfer operators in 37 countries.
Its customers and transaction value are expected to further increase with the launch of Telebirr-based digital financial services on Friday.
The new services targeted to bring “unbanked sections of our society into the formal financial sector, thereby enabling them to access low-cost credit and savings services,” Ethio Telecom officials said.
Ethio telecom said it plans to serve more than 12.8 million unique customers within the first year of operation with a total transaction volume of 108 million and a transaction value of Birr 19.5 billion.
“The Launching of Telebirr digital financial services, which is expected to have paramount effect in ensuring economic inclusion of the wider community, reinforces our company’s commitment and contribution to the realization of digital Ethiopia,” telco officials said. “Our company will step up its effort to bring new technologies and services that have a wide range of impacts on our society”.