Safaricom, a telecommunications giant from Kenya, has made a remarkable stride in Ethiopia. Recently, the National Bank of Ethiopia has granted Safaricom a Payment Instrument Issuer License that permits the corporation to expand its successful mobile money business to the untapped Horn of Africa country, which has a population of over 100 million individuals. This milestone marks the first-ever mobile money license issued to a foreign investor in Ethiopia.
Safaricom can now extend a range of financial services, including mobile banking, mobile wallets, internet banking, and card banking, as a result of this license. Furthermore, this move underscores Ethiopia’s dedication to promoting financial innovation and inclusion.
Safaricom’s M-Pesa service is already well-established in Kenya, where it boasts over 40 million users. Safaricom has been looking to expand its services beyond Kenya’s borders for a while, and Ethiopia presents a significant opportunity. Ethiopia, the second-most populous country in Africa, has a booming economy.
This move is the latest in a series of developments that have opened Ethiopia’s telecommunications industry to foreign investors. The Ethiopian government had revealed its plans to liberalize the country’s telecommunications sector in 2019, which was previously controlled by a state-owned monopoly. This has piqued the interest of various international companies, including Safaricom.
The deal was brokered by Kenyan President William Ruto and Ethiopia’s Prime Minister Abiy Ahmed in Addis Ababa, Ethiopia. In a statement, the National Bank of Ethiopia welcomed the introduction of different types of digital financial services, stating that these would eventually become a tool to help citizens transact, save, borrow, invest, and more, as Ethiopia’s financial system is modernized over the coming years.
Safaricom’s entry into Ethiopia’s mobile money market will undoubtedly have a significant impact on the country’s economy. Mobile money services have a positive effect on financial inclusion, particularly in countries where access to traditional banking services is scarce. Safaricom’s extensive experience in this sector puts it in an excellent position to make a significant contribution to Ethiopia’s financial system.