M-PESA debuts in Ethiopia

Cash transfer service M-PESA has made its highly anticipated debut in the Ethiopian market. The launch comes three months after receiving the green light from the National Bank of Ethiopia, marking a significant step forward for both financial inclusion and the country’s economic transformation.

M-PESA’s entry into Ethiopia follows a three-month pilot and testing phase, demonstrating the company’s commitment to ensuring seamless and efficient services from the outset.

Notably, Safaricom Ethiopia invested $150 million for the M-PESA license, underlining the strategic importance of the venture.

Transformative potential of M-PESA

The cash transfer service, which already serves over 51 million customers across seven African countries, is poised to reshape Ethiopia’s financial landscape. With a focus on both the banked and unbanked populations, M-PESA is set to leverage its reputation as Africa’s most successful mobile money platform to provide safe, secure, and convenient financial solutions.

Stanley Njoroge, Interim CEO of Safaricom Ethiopia, emphasized the transformative potential of M-PESA: “M-Pesa is known to be a game-changer for financial inclusion and provides services to more than 51 million customers across seven countries in Africa offering a safe and secure platform for transactions.”

He further highlighted M-PESA’s alignment with Ethiopia’s Digital Payments Strategy 2025, emphasizing the platform’s role in driving digital inclusion and innovation.

Customers can now send money within Ethiopia, and receive money from within the country and abroad. They can also pay to merchants, buy airtime, transfer to their bank accounts, and send money from their bank accounts to their M-PESA wallets.

As part of its comprehensive approach, Safaricom Ethiopia has ensured technical readiness, forged crucial partnerships with banks, and recruited, trained, and onboarded a network of M-PESA agents.

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Ethiopia economic reforms

Paul Kavavu, Interim General Manager of Safaricom M-PESA Mobile Financial Services PLC, noted the platform’s unique ability to cater to individuals without access to traditional banking services: “It also provides financial services to millions of people who have mobile phones, but do not have bank accounts, or only have limited access to banking services.”

M-PESA’s entry into Ethiopia coincides with broader economic reforms, including the Ethiopian government’s plan to sell up to 45 percent of Ethio Telecom. Prime Minister Abiy Ahmed’s vision to liberalize the telecom sector aligns with a larger agenda of economic openness, aimed at propelling Ethiopia’s growth trajectory.

While Safaricom reported a 10 percent dip in profit for the year ended March 2023, attributed partly to the challenges of the Ethiopia business, the launch of M-PESA in the Ethiopian market presents a promising avenue for growth. As Ethiopia’s financial landscape evolves with the introduction of M-PESA, the platform’s proven success across the African continent is expected to catalyze positive economic and social change, enhancing financial accessibility and convenience for the nation’s diverse population.

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