ADDIS ABABA – The National Bank of Ethiopia (NBE) has revised its directive to promote safety and spur competition and innovation among mobile money service providers.
The newly revised Payment Instrument Issuer Directive for mobile money providers was issued on Monday.
“The Directive has been improved to create a more enabling regulatory framework that promotes competition and innovation,” the NBE said.
Apart from minimizing currency in circulation, NBE officials see mobile money services as “instrumental to reach communities that are unserved and underserved by formal financial institutions.”
Recent regulatory changes allowed non-banks to provide mobile money services, providing competition in the sector historically dominated by banks and micro-finance institutions.
Ethio Telecom’s Telebirr mobile money has already onboarded 34.3 million subscribers since its launch in May 2021.
Its competitor, Safaricom also introduced its well-known M-Pessa mobile money to the country in August, as authorities push to bring a third telecom operator in to allow more competition in the market.
The NBE says the revised Directive “provides detailed requirements for foreign mobile money service providers” in line with the amended National Payment System Proclamation No 1282/2023.
The directive raises the daily electronic account balance limit from Birr 30,000 to 75,000 and introduces a new daily aggregate transaction limit of Birr 150,000 to keep up with market developments.
The directive exempts certain transactions such as utility, tax, airline ticket, fuel, and bulk payments from transaction limits.
The NBE further states that the revised directive “allows mobile money service providers to facilitate additional services such as capital market products”.
It also enables banks to establish subsidiaries focused on providing mobile money services, and strengthens the corporate governance rules governing payment instrument issuers, the NBE has explained in a statement today.
The directive was revised as part of NBE’s ongoing efforts to modernize the financial sector in line with the National Digital Payment Strategy (2021-24).
“The National Bank of Ethiopia will continue to take significant steps to build a modern, secure, inclusive, and competitive digital payment ecosystem,” the statement reads.
“The ultimate aim is to create a stable financial system that provides every citizen with access to a diverse array of financial services that, in turn, help propel economic growth and widespread improvement in standards of living,” it concludes.