In a historic move, the National Bank of Ethiopia has issued a license to Kenya’s telecom giant Safaricom to operate mobile money services in Ethiopia. This marks the first time a foreign firm has received such a permit in the country, which has a population of over 110 million people.
Safaricom launched its operations in Ethiopia last year after the country opened its market to international bidders. Until then, state-owned Ethio Telecom had been the sole provider of telecom and mobile money services in Ethiopia, one of the largest closed markets in Africa.
The granting of the license reflects the National Bank of Ethiopia’s commitment to fostering financial innovation and inclusion in the Ethiopian market. The move also comes at a time when Ethiopia has seen significant growth in mobile money services, with the authorities making it the sole means of payment at fuel stations and government financial institutions.
Safaricom CEO Peter Ndegwa announced that the company would roll out mobile financial services in Ethiopia before the end of this year. The telco expects this move to lift M-Pesa’s profile, as it becomes available to millions of unbanked Ethiopians. Safaricom’s Ethiopian subsidiary has already grown its customer numbers to three million users in just seven months.
The consortium led by Safaricom paid $150 million as license fees to the National Bank of Ethiopia for the mobile money service permit. The permit has been granted to Safaricom M-Pesa Mobile Financial Service, a new subsidiary and the first foreign-owned unit to receive the license.
Safaricom’s entry into Ethiopia marks a significant step in the development of the country’s financial system, bringing greater efficiency, safety, and transparency to the rapidly growing sector. With voice, messaging, and data services already rolled out in 22 cities and regions, Safaricom is well-positioned to make a big impact in Ethiopia’s telecom and financial sectors.