News / Africa

Ethiopia to Introduce Mobile Banking

Ethiopia is one of the few remaining African countries to introduce mobile banking, Thursday, Oct. 25, 2012.Ethiopia is one of the few remaining African countries to introduce mobile banking, Thursday, Oct. 25, 2012.
x
Ethiopia is one of the few remaining African countries to introduce mobile banking, Thursday, Oct. 25, 2012.
Ethiopia is one of the few remaining African countries to introduce mobile banking, Thursday, Oct. 25, 2012.
TEXT SIZE - +
— Ethiopia is one of the few remaining African countries to introduce mobile banking. With the booming economy and a population of 80 million this country could be the next gold mine for mobile banking companies.
 
Mobile banking has proved to be a lucrative venture in the developing world, where large parts of the population belong to the so-called "unbanked."  In Africa, only Ethiopia and Zimbabwe do not provide mobile money services.  That will change soon for Ethiopia.
 
BelCash and M-Birr are mobile banking technology providers that have been in Ethiopia for the last three years to set up mobile banking and mobile money services.  

Dutch company BelCash is focused on mobile banking, working in partnership with banks to provide easier access to finance through bank accounts. Ireland-based M-Birr is a mobile money service that works with micro finance institutions where no registration at a bank is needed.
 
The companies will face several challenges in Ethiopia. Half of the population is said to be illiterate, and the telecom coverage in the country is far from perfect. The pressure on the telecom network will increase as the number of Ethiopians owning a mobile phone increases.

In the last four years, the number grew from three million to 17 million users. And Ethiopia’s telecom provider, Ethio Telecom, expects that number to grow to 40 million in the next three years.
 
BelCash founder Vince Diop does not believe a limited network or high illiteracy rate will be a barrier for introducing mobile banking.

“We have multiple channels that people can use, like sms, ivr, so that if one channel is not working properly than still they have other options,” Diop said.

The government regulates Ethiopia’s telecommunications market, meaning that there is only one telecom provider and others are not allowed. Both BelCash and M-birr are strictly technology providers. M-Birr General Manager Thierry Artaud sees the regulated market as a benefit.

"If you look at your neighbors, Kenya, Tanzania Uganda, they all have multiple mobile operators and they all have mobile money services and even multiple mobile money services," said Artaud. "If the country was deregulated, the big operators like Vodafone, MTN would come to Ethiopia and launch a mobile money service. Because its not deregulated we are protected."
 
Ethiopia has looked at other developing countries to learn from their experiences with mobile banking. The National Bank of Ethiopia visited Kenya, Pakistan and Brazil.
 
Frezer Ayalew is the director of micro-finance supervision of the National Bank of Ethiopia. He says mobile banking services could be a positive development for Ethiopia.

“Financial service accessibility is very necessary in order to smoothen consumption, built household assets. And it’s critical for people to have access to finance," said Ayalew. "For the economy it has great contribution in terms of mobilizing domestic savings with these services.”
 
Ethiopia also strongly regulates its financial institutions. The National Bank of Ethiopia just finished a draft directive on how mobile banking services should be regulated as more companies have shown interest in starting mobile banking services.
 
Frezer says the directive is needed to face possible challenges.

"The overall purpose of the directive is to make sure that the financial institutions are providing the service in a prudent and safe manner so that the stability of financial system is maintained," said Frezer.
 
Artaud says that until the directive has been finalized, M-Birr is allowed to start a pilot.

“People will be able to start registering for real, with real money and transferring money throughout the country," said Artaud. "The only limitation will be where the branches are, because we are talking about roughly thirty points of sales for the pilot.”
 
The National Bank of Ethiopia expects that the directive will be approved in the coming months.

You May Like

Multimedia Anti-Keystone XL Protests Continue

Demonstrators are worried about pipeline's effect on climate change, their traditional way of life, health and safety More

Thailand's Political Power Struggle Continues

Court gave Prime Minister Yingluck Shinawatra until May 2 to prepare her defense over abuse of power charges but uncertainty remains over election timing More

Malaysia Plane Search Tests Limits of Ocean Mapping Technology

Expert tells VOA existing equipment’s maximum operating depth is around 6 kilometers as operation continues on ocean bed for any trace of MH370 More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pet Kangaroo Helps Spread Environmental Messagei
X
Penelope Poulou
April 22, 2014 5:53 PM
Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pet Kangaroo Helps Spread Environmental Message

Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pro-Russian Separatists Plan 'Federalization Referendum' in Eastern Ukraine

Pro-Russian separatists in eastern Ukraine say they plan to move forward next month with a referendum vote for greater autonomy, despite the Geneva agreement reached with Russia, the U.S. and Ukraine to end the political conflict. VOA's Brian Padden reports from the city of Donetsk in Eastern Ukraine.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video International Students Learn Film Production in World's Movie Capital

Hollywood - which is part of Los Angeles - is the movie capital of the world, and many aspiring filmmakers go there in hopes of breaking into the movie business. Mike O'Sullivan reports that regional universities are also a magnet for students who hope to become producers or directors.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid