The National Bank of Ethiopia (NBE) has announced on May 11 the issuance of a mobile money service license to Safaricom M-Pesa mobile financial services. Previously, only Telebirr, part of the state-owned Ethiopian Telecom network, operated in the market.
Kenya-based Safaricom was also the first company to break Ethiopian Telecom's monopoly on mobile phone services in Ethiopia through its Safaricom Telecommunications Ethiopia subsidiary in October. The NBE is introducing legislation to Parliament in early 2022 to enable private services. Safaricom Ethiopia currently has nearly 3 million users, the company said. By comparison, Ethiopia Telecom has 54 million subscribers in a country of 118 million people. The government is now reportedly looking to sell a 45% stake in Ethiopia Telecom.
Safaricom reportedly paid $150 million for its license and expects to launch the M-Pesa service in the second half of this year. M-Pesa has been rolled out in nine African countries and Afghanistan. It provides financial services to people, whether they have a bank account or not, through their mobile phones. Despite the uncertainty over the legal status of crypto assets in Ethiopia, the country is slowly opening up for greater financial digitization. NBE wrote in its announcement:
"NBE will continue to take steps to deepen Ethiopia's digital financial ecosystem. To this end, we will strongly support the proliferation of digital payment systems as an alternative to cash-based transactions in the economy."
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