ADDIS ABABA – The National Bank of Ethiopia (NBE) says today it has issued a mobile money service license to Safaricom M-Pesa Mobile Financial Service Plc, a subsidiary of Safaricom Telecommunication Ethiopia Plc.
This is the first mobile money license granted to a foreign investor in Ethiopia where a dozen of local fintechs provide financial services along with 30 commercial banks.
M-Pesa was granted the license six months after Ethiopian lawmakers enacted a revised National Payment System Proclamation, allowing foreign companies to engage in payment system operations.
“The issuance of the mobile money license to P-Pesa reflects the NBE’s ongoing objective of fostering financial innovation and inclusion in the Ethiopian market,” the NBE said in a statement.
The license will enable Safaricom’s subsidiary to roll out mobile financial services in Africa’s second most populous nation.
It is expected to face fierce competition from Ethio Telecom’s TeleBirr which acquired 30 million users since its launch in May 2021, showing the potential of the market.
The menu of digital finance offerings including mobile banking, mobile wallets, internet banking, and card banking has expanded rapidly in recent years.
“We welcome this shift to the use of digital financial services so as to bring greater efficiency, safety, and transparency to the country’s rapidly growing financial system,” said the Central Bank.
Looking ahead, the NBE said, it will continue to take measures to deepen Ethiopia’s digital finance ecosystem and welcome the introduction of diverse forms of digital financial services.
“To this end, we will strongly support the spread of digital payment systems as a substitute for cash-based transactions within the economy,” the NBE said.
“The National Bank of Ethiopia wishes Safaricom’s M-PESA service well as it launches its operations in the very near future,” it added.