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.
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

Anti-Terror Drills Highlight China’s Push Into Central Asia

China, Russia, several central Asian countries wrap up massive anti terrorism military drills in Inner Mongolia More

Erdogan’s First Step: Secure More Power in New Role in Turkey

Erdogan was sworn in as Turkey's first popularly elected president on Thursday; he picked former foreign minister Ahmet Davutoglu as PM More

Pakistan Army Fails to Break Political Deadlock

PM Sharif claims he didn't ask army to defuse crisis; military rejects claim More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Ukraine Battles Pro-Russia Rebel Assaulti
X
Daniel Schearf
August 29, 2014 9:30 PM
After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Ukraine Battles Pro-Russia Rebel Assault

After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Growing Business Offers Paint with a Twist of Wine

Two New Orleans area women started a small business seven years ago with one thing in mind: to help their neighbors relieve the stress of coping with a hurricane's aftermath. Today their business, which pairs painting and a little bit of wine, has become one of the fastest growing franchises across the U.S. VOA’s June Soh met the entrepreneurs at their newest franchise location in the Washington suburbs.
Video

Video Ebola Vaccine Trials To Begin Next Week

The National Institutes of Health says it is launching early stage trials of a vaccine to prevent the Ebola virus, which has infected or killed thousands of people across West Africa. The World Health Organization says Ebola could infect more than 20,000 people across the region by the time the outbreak is over. The epidemic has health experts and governments scrambling to prevent more people from becoming infected. Zlatica Hoke has more.
Video

Video Asian Bacteria Threatens Florida Orange Trees

Florida's citrus fruit industry is facing a serious threat from a bacteria carried by the Asian insect called psyllid. The widespread infestation again highlights the danger of transferring non-native species to American soil. VOA’s George Putic reports.
Video

Video Aging Will Reduce Economic Growth Worldwide in Coming Decades

The world is getting older, fast. And as more people retire each year, fewer working-age people will be there to replace them. Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world. But experts say it’s not too late to mitigate the economic impact of the world’s aging populations. Mil Arcega has more.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.
Video

Video America's Most Popular Artworks Displayed in Public Places

Public places in cities across America were turned into open-air art galleries in August. Pictures of the nation’s most popular artworks were displayed on billboards, bus shelters, subway platforms and more. The idea behind “Art Everywhere,” a collaborative campaign by five major museums is to allow more people to enjoy art and learn about the country’s culture and history. Faiza Elmasry has more.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. Shaikh Azizur Rahman reports from Kolkata.

AppleAndroid