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Safaricom Introduces M-Pesa’s Mobile Money Service to Ethiopia

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Sarah Pereez
Sarah Pereezhttps://lahorelives.com
With almost 3 years of experience in journalism, Sarah Pereez has joined Lahore Lives as a Editor in 2023. She has previously worked as an Entertainment journalist, covering Hollywood & Bollywood news. At Lahore Lives, she tracks news updates, edit articles and write copies for science and technology.

In a groundbreaking move, Kenyan telecom giant Safaricom has introduced its acclaimed mobile money service, M-Pesa, to the Ethiopian market. This momentous step marks the expansion of M-Pesa’s influence into Africa’s second-most populous nation, Ethiopia.

According to a report from the Financial Times on August 26, the service has officially launched this month, and a national advertising campaign will start in September.

Unlocking Opportunities: M-Pesa’s Arrival in Ethiopia

Safaricom’s CEO, Peter Ndegwa, expressed his enthusiasm for this strategic move, stating, “By the end of September, we will fully launch M-Pesa here. We have meticulously developed cutting-edge technology, curated innovative products, and established partnerships with multiple banks.

The growth potential is immense.” This ambitious vision speaks volumes about the impact that M-Pesa aims to create within Ethiopia’s financial landscape.

A Pioneering Venture into Ethiopia’s Telecommunications

Safaricom’s entry into Ethiopia signifies a groundbreaking shift in the nation’s telecommunications sector. As the first private telecom company to operate in Ethiopia, Safaricom has shattered barriers and paved the way for other players in the industry.

The Ethiopian market, while promising, has historically been challenging to access due to governmental control over critical sectors such as banking.

Bridging the Gap: Ethiopia’s Mobile Money Evolution

The African continent has been witnessing a transformative mobile money revolution, with countries embracing technological advancements at an unprecedented scale. Safaricom’s success story with M-Pesa serves as an exemplary case.

Praveksha Maharaj, the Director of Partnerships MEA at Entersekt, highlighted this shift, explaining, “Africans have embraced technology on a grand scale and have successfully embraced the future of digital payments.” Safaricom’s M-Pesa has been at the forefront of this revolution.

M-Pesa’s Resounding Impact in Kenya

Safaricom’s M-Pesa, introduced in 2007, has played a pivotal role in driving regional financial inclusion. With a staggering 40 million active customers and over 500,000 merchants in Kenya accepting M-Pesa as a reliable currency, the service has revolutionized how people transact goods and services.

Ethiopia’s Path to Mobile Money

Ethiopia’s journey into mobile money was relatively delayed compared to its African counterparts. In 2021, state-owned Ethio Telecom introduced the country to Telebirr, its first nationwide mobile money service.

It wasn’t until August 2022 that Ethiopian FinTech company Kacha Digital Financial Services secured the first private mobile money license from the National Bank of Ethiopia.

Unveiling Demand: Mobile Money in Ethiopia

The quick uptake of Telebirr in Ethiopia demonstrates the clear need for a local mobile money service. Over one million individuals registered for a Telebirr account within a week of its launch.

The late entrance of Ethiopia into the mobile money landscape can be attributed to the restrictive nature of its telecom market, which previously hindered private enterprises from building and operating mobile networks.

Safaricom’s Strategic Investment

Safaricom, partially owned by the U.K.’s Vodafone, embarked on a transformative journey by securing a telecom license worth $850 million two years ago. Additionally, they invested an additional $150 million in May to acquire a mobile money license, solidifying their presence and commitment to the Ethiopian market.

Peter Ndegwa emphasized, “Mobile money is tailor-made for a cash-centric country like Ethiopia, where credit card penetration is limited, and rural markets await connectivity. Ethiopia represents the final frontier in this evolution.”

In conclusion, Safaricom’s bold entry into Ethiopia’s telecommunications and financial landscape with M-Pesa marks a pivotal moment. As the first private telecom company to venture into the Ethiopian market, Safaricom sets the stage for transformative changes.

The introduction of M-Pesa has the potential to revolutionize how Ethiopians conduct financial transactions, bridging gaps and fostering financial inclusion.

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