Safaricom has revealed that its mobile money service M-Pesa will go live in Ethiopia this year.
Dilip Pal, Safaricom’s chief financial officer in an OPED published in the Standard.co.ke said the launch will significantly grow financial inclusion in the country which currently stands at about 35 percent.
‘’Ultimately, this will help to improve access to financial services hence spur economic activity for millions of Ethiopians who currently lack access to traditional banking services.’’
This revelation comes about two months after it emerged that the National Bank of Ethiopia, the industry regulator was proposing a $150 million license fee from M-Pesa and other mobile operators who want to set up shop in the country.
In a draft proposal signed by Solomon Damtew, the Payment and Settlement System Director at the National Bank of Ethiopia, the regulator is referring to the $150 million fee as an investment protection fee. This fee is described as the amount paid by foreign nationals who invest in businesses exclusively reserved for domestic investors or the government.
This draft law opens the way for discussion on the progress of Safaricom’s application to launch mobile money services in Ethiopia.
Since launching in Ethiopia, Safaricom had made its intentions clear about launching M-Pesa in the country. While the initial license allowed the company to compete against state monopoly Ethio Telecom, it couldn’t offer its revolutionary money-remittance services due to legal limitations. This however changed after in April, Ethiopia’s Central Bank drafted a Bill that opened the door for foreign investors such as Safaricom to offer mobile money services.
The government-backed bill stated, “Foreign nationals may be allowed to invest in a payment instrument issuer or a payment system operator business, or establish a subsidiary which shall be licensed as a payment instrument issuer or payment system operator.”
‘’Ethiopia’s location at the crossroads of Africa, with easy access to markets in the Middle East, Europe, and Asia positions it as a strategic trade market and an attractive destination for foreign investors.’’ Dilip notes in the OPED.
With a population of more than 100 million people, Ethiopia is indeed a highly promising market for Safaricom. Ethio Telecom, the country’s largest operator has over 50 million subscribers. By mid-March, Safaricom Ethiopia had grown its customer numbers to 2.8 million users.
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