Safaricom M-Pesa to launch mobile money services in Ethiopia
Safaricom Ethiopia has received a license from the National Bank of Ethiopia to offer mobile money services in the country under the M-Pesa brand.
This is the first mobile money license granted to a foreign investor in Ethiopia and it will enable Safaricom to expand its lucrative mobile financial service to the untapped Horn of Africa nation with over 100 million people.
Safaricom Ethiopia is a subsidiary of Safaricom Telecommunication Ethiopia Plc, which is part of a consortium led by Safaricom PLC that won one of the two private telecommunication licenses in Ethiopia last year.
The consortium offered $850 million and promised to invest $8.5 billion over 10 years. Safaricom Ethiopia launched its GSM services in October 2021 and has since added close to 3 million customers and built a network of over 114 outlets and 1300 sites.
Safaricom PLC CEO Peter Ndegwa said: “We are excited that this is a great milestone following our entry into Ethiopia. This positions us to provide essential financial services to the Ethiopian population. We are looking forward to launch and roll out the service over the next few months.”
M-Pesa is the world’s largest mobile payment system and Africa’s largest Fintech, and the world’s first mobile money transfer system. It empowers over 30 million customers to transact, save or borrow money through their mobile phone. M-Pesa catalysed financial inclusion in Kenya to 84% from a low of 26.7% in 2006 according to the 2021 FinAccess Survey and generated over KES 117.2 billion ($886 million) in revenue in FY23.
The National Bank of Ethiopia said: “The issuance of the mobile money license reflects the NBE’s on-going objective of fostering financial innovation and inclusion in the Ethiopian market. 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.”
The bank also said it will strongly support the spread of digital payment systems as a substitute for cash-based transactions within the economy and welcome the introduction of diverse forms of digital financial services so that they become a tool to help citizens transact, save, borrow, invest, and more as Ethiopia’s financial system is modernized over the coming years.
Safaricom PLC also announced its full-year results for FY23, which saw its net income increase by 3.0% to KES 74.5 billion for Safaricom Kenya. However, its group net income excluding minority interest declined by 10.6% due to expected start-up costs and investment in rolling out operations in Ethiopia within the year.
Ndegwa said: “We have delivered a solid set of results despite the tough operating environment occasioned by slowdown in business activity in an election year in Kenya, tough macro environment as well as change in mobile termination rates which impacted our voice revenues significantly. The business is stable and regained a strong positive momentum in the second half of the year. Looking into the future, we passionately believe that our business is well-positioned to support our customers and provide technology solutions as we transition into a purpose-led technology organization in line with our 5 YR strategy.”
