Safaricom M-PESA was incorporated to deliver and provide mobile financial services in Ethiopia.
On 10th May 2023, the National Bank of Ethiopia (NBE) granted the payment instrument issuer license to the Safaricom M-PESA Mobile Financial Services PLC (Safaricom M-PESA ET) upon fulfilling the set conditions, i.e., incorporation of the subsidiary, proof of payment of USD 150M for the investment protection fee and the paid-up capital of ETB 50M.
The license allows Safaricom M-PESA ET to issue payment instruments and use agents in its mobile money business. Safaricom M-PESA ET is a wholly owned subsidiary of Safaricom Telecommunications Ethiopia PLC, apart from a nominal share held by the Consortium holding company, Global Partnership of Ethiopia BV.
M-PESA launched with the following services: deposits, withdrawals, transfers (P2P), airtime and data package purchase, M-PESA to Bank (C2B) and Bank to M-PESA (B2C), merchant payments (with transacting tills) and international money remittances services (inbound transfers only).
Safaricom says that other services will follow as it continues enhancing customer education and awareness of M-PESA in Ethiopia.
Safaricom closed the quarter on December 31, 2023, with 3.1 million registered customers.
It also reported 26.2k M-PESA agents and 43.1k merchants.
M-PESA is also interoperable with 9 banks, including Commercial Bank of Ethiopia, Dashen Bank, Bank of Abyssinia, Awash International Bank, Co-operative Bank of Oromia, Abay Bank, Hibret Bank, Berhan Bank and Bunna Bank for M-PESA to Bank.
For Bank to M-PESA services, the service is interoperable with 7 banks, including Commercial Bank of Ethiopia, Dashen Bank, Bank of Abyssinia, Awash International Bank, Co-operative Bank of Oromia, Abay Bank, and Bunna Bank.
The opportunity for M-PESA in the over 119 million populous nation of Ethiopia remains untapped, given the low levels of financial inclusion.
According to the National Bank of Ethiopia (NBE), the adult population with an account at a financial institution stood at 45% in 2020.
The National Financial Inclusion Strategy (NFIS 2021–2025) aims to increase financial inclusion from 45% to 70% of all adults by 2025, partly by scaling digital payments through mobile money services.
The country also aims to increase the use of digital payments from 20% of all adults in 2020 to 49% by 2025.
63 million people in Ethiopia are over 18 years old, with 13.5 million between the ages of 13 and 18.
This presents the opportunity for M-PESA to drive financial inclusion to levels seen in Kenya after over 20 years of operations in the country, to over 84% in 2021 from 27% in 2006, according to The Financial Inclusion Statistics Conference.
