Ethiopia has reportedly started changing certain national payments laws in an effort to clear the way for Safaricom to launch M-PESA, Africa’s largest fintech platform, to the Horn of Africa country’s virtually untapped market of 110-million people.
The National Bank of Ethiopia (NBE) has drafted a bill that will allow foreign investors to launch and operate mobile money services in the country, making way for companies like Safaricom, which is planning to begin operations in Ethiopia within the year.
Last year, a consortium led by Safaricom and Vodafone secured Ethiopia’s first-ever private mobile telephony license for $850-million, however, the deal did not include or permit mobile financial services like M-PESA.
According to Business Daily Africa, the NBE now plans to amend this and remove the final remaining legal hurdle for Safaricom to launch M-PESA in the country through the new bill made public last week.
Included in the bill is the clause that “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.”
“So far, there is no law that enables foreign operators like M-PESA to acquire a license in Ethiopia,” said Marta Hailemariam, head of payment settlement at NBE, said.
Hailemariam continues to say that if the new amendment is approved, it will “allow M-Pesa to get a license in Ethiopia.”
Safaricom launching M-PESA in Ethiopia would be a major coup for the Kenyan telecom. The firm is particularly attracted by the growth potential Ethiopia’s massive population offers, the second-largest in Africa behind Nigeria. The country’s 114.1-million people currently only have a mobile phone penetration rate of 51.4 percent.
The people of Ethiopia are also ravenous for mobile financial services. State-owned Ethio Telecom launched its own mobile fintech service called Telebirr last year, which attracted four million users within a few weeks. Safaricom’s M-PESA is, by the sheer size of its user base (over 50-million), the most popular mobile finance platform on the continent.
Now, with both the Ethiopian government making way for Safaricom and the Ethiopian people ready and willing to embrace mobile finance, Safaricom may just get its cake and eat it too.