Under the directive, any eligible company may provide its customers with basic financial transaction services such as savings, credit, insurance and pension products, including cash outflows and inflows; domestic remittances; bill payments; retail payments; over-the-counter transactions; and incoming international remittances.
Three-quarter of the Ethiopian population is unbanked
This new legal framework to promote the sector in the country is set up - remembering that as soon as he came to power in 2018, Prime Minister Abiy Ahmed announced his commitment to develop, including through the liberalization of the sector, the telecommunications sector in a country already well engaged in a "mobile money revolution". In 2015, M-Birr, following the M-PESA model in Kenya, popularized digital financial services, especially in remote areas where access to banking facilities is limited. This financial inclusion tool was promoted by the European Investment Bank through a €3 million support to M-Birr in 2018, its first FinTech mobile investment in the African continent. Today, M-Birr, which has more than one million registered customers on the platform, is both a pioneer and a leader in the sector in Ethiopia, committed to financial inclusion in a country where three quarters of the local population of more than 100 million inhabitants are unbanked, and as such is supported by many institutional partners. The most recent is Deutsche Investitions (DEG), through an investment of 4 million euros.
Since then, the local authorities have continued to encourage the sector. In September 2019, the government proposed that any company registered in the country could apply for a mobile money licence as long as it is 100% owned by Ethiopians or non-nationals of Ethiopian origin and has a minimum capital of BIR 50 million.
With the regulation adopted last month, the local FinTech ecosystem, which is opening up to new stakeholders, should grow rapidly and actively participate in strengthening financial inclusion in the country, as expected by the authorities.